The research company’s Single Source survey, which canvasses the opinions of over 50,000 consumers per annum, found that 1.1 million Millennials (defined as being born between 1976-1990) have taken out private health insurance since 2008.
Millennials eating into other age group’s market shares
This has seen Millennials go from accounting for 16.3% of the private health insurance market to 24.5%, along with 49.6% of overall market growth for the sector.
Generation Z (born between 1991-2005) also saw their share skyrocket from 0.7% to 8.8% (749,00 customers).
Conversely, Pre-Boomers, Baby Boomers, and Generation X all saw their share of the private health customer base shrink in the same period:
- Pre-Boomers dropped from 21.8% to 12.2% (382,000 customers)
- Baby Boomers dropped from 31.8% to 27.3% (297,000 customers)
- Generation X dropped from 29.4% to 27.2% (456,000 customers)
Millennial private health insurance contingent on income
While nearly half (43.6%) of all Australian Millennials now have private health insurance, Roy Morgan’s research found that high-income-earning Millennials were much more likely to have private health insurance.
The research found that:
- 71.1% of Millennials earning over $100k p.a. had private health insurance
- 58.6% of Millennials earning between $80k and $100k p.a had private health insurance
- 46.4% of Millennials earning between $50k and $80k p.a. had private health insurance
- Only 32.4% of Millennials earning less than $50k p.a. had private health insurance
The figures differed slightly when it came to household income, with the research finding that:
- 73.1% of Millennial households earning over $150k p.a. had private health insurance
- 56.2% of Millennial households earning between $120k and $150k p.a. had private health insurance
- 45.6% of Millennial households earning between $90k and $120k p.a. had private health insurance
- 35.9% of Millennial households earning between $60k and $90k p.a. had private health insurance
- Only 23.1% of Millennial households earning less than $60k p.a. had private health insurance
Different generations, different motivations
Roy Morgan Research Industry Communications Director Norman Morris said that Millennials nominated a variety of reasons for taking out private health insurance, with 20.7% saying they “only did it to avoid paying extra tax”.
Comparatively, only about 10% of other generations nominate tax reasons as motivation for taking out private health insurance.
Mr Norris also noted that Millennials are much more reliant on advice from friends and family when it comes to choosing a provider, with 30.1% of Millennials relying on said advice compared to only 12% among other age demographics.
He flagged a decline in brand loyalty among younger customers, saying that Millennials “present a challenge in terms of brand loyalty”.
“In terms of brand loyalty, Millennials show that they are much less likely to renew automatically with the same insurer as they indicate that they are either more likely to shop around before deciding, don’t know what they will do or intend to change company,” he said.
“Although Millennials have been seen to be a critical segment to achieve growth in private health insurance, they present a challenge to engage, particularly those on lower incomes and those with major alternative commitments such as home loans and family expenses.”
He also noted that Millennials would likely “need an incentive to renew with the same provider,” but that “incentives are not the same as discounts and understanding how to engage Millennials requires understanding of their motivations and values”.