How do I get healthier, richer, happier? These might be some questions in the minds of young adults aged 11 to 26, the so-called GenZ. Insurers hold many of the answers this Generation is looking for. According to a BearingPoint study 41% of GenZers lack basic knowledge about insurance. So why would they turn to insurers for information? And do insurers know enough about this customer group to address them correctly?
During InsurTech Insights in London InsurTech Hub Munich’s Programme Director Esther Prax discussed the race to GenZ with experts Graham Gordon, P&C Product Director at Sapiens, Sabina Kravcak, Head of Strategy at AXA UK, Josh Hart, Co-Founder, CPO and CTO at YuLife and Dr. Robin Kiera, Founder and CEO of digitalscouting. Here are some takeaways on GenZ to optimize your distribution strategy for the next generation:
1. GenZ is more likely to buy insurance products, but not any product
Recent studies indicate that GenZ is more likely to buy insurance products than previous generations. Especially following the pandemic, this generation has developed stronger concerns towards their own health and financial wellbeing. A study conducted by AXA UK has revealed that more than one in three 18 to 24-year-olds (35%) plan to spend more on insurance, in contrast to only 11% of those aged 45 to 54. GenZers’ life journeys, however, do not necessarily follow the traditional path set by older generations and, as such, require new and different insurance products. “Insurers should read into the life stages GenZers are going through” – commented Sabina Kravcak, Head of Strategy at AXA UK. “These are the people in school or getting their first job, they went through a pandemic, geopolitical instability and now a very tight labor market. Understanding where they are coming from is relevant to meet them through the significant channels but also to speak with them by addressing their primary concerns”.
The untapped potential within this market segment is huge. Research indicates that GenZers are more inclined than previous generations to insure not only their pets but also their personal belongings such as watches and jewelry. Many either own or plan to buy a vehicle – despite their sustainable wishes – and are unafraid to forge their own entrepreneurial paths.
However, not all that glitters is gold. GenZers expect personalized services, instant communication and are quick to abandon brands that don’t provide a satisfactory user experience. A study by Accenture revealed that 78% of Gen Z consumers said they would leave a beloved brand after just one negative experience. Josh Hart, Co-Founder, CPO, and CTO at Yulife, comments on the unique nature of this generation, stating, “We are dealing with a more extreme group of people than we were with Millennials. This is a huge opportunity because insurance needs something extreme to shift the perspective of why people desire it, want it and use it”.
2. GenZers are not “greener” than previous generations
While GenZ cares about sustainability, it may not necessarily be the deciding factor in their decision-making process. According to a study by Cologne based market research institute HEUTE UND MORGEN, Gen Z is not more sustainability-oriented than other generations. “We see two contrary movements in this age group,” explained digitalscounting Founder and CEO Robert Kiera. “One the one hand you have the climate change movement, Fridays for Future, with protests on the streets…that’s one aspect. On the other hand, you have the Trade Republic and brokerage generation who sells stocks, NFTs and crypto on their smartphones. We cannot say that this is ‘the’ generation.”
Although sustainability in the insurance sector is above average in the GenZ, it is also a widespread concern in the general population. In fact, the HEUTE UND MORGEN study found that 52% of all insurance customers, and 59% of GenZers, would like to be advised on sustainability aspects. It is the Boomers – and not the GenZ – who pay the most attention to sustainable investments of the providers and make the most impact due to their higher purchasing power.
3. Their purchase journey is not digital-only but digital-first
Digital journeys for GenZers are simply assumed. It’s in their DNA to filter and compare multiple digital sources and form and reform purchasing preferences. IT consultancy Qperior highlights that Gen Z not only expects seamless digital experiences but even defines them as “hypercognitive” due to their ability to efficiently scan multiple sources of information.
For GenZers, their journey often begins on websites and social media platforms, where they establish brand reputation. Positive online reviews are considered critical by 43% of Millennials and Gen Z, followed by factors like brand reputation, convenience, social media engagement, and a modern website.
They prioritize transparency in the information presented to them and rely on trusted advisors, including friends and family, during their decision-making process. Despite their digital-first approach, younger generations place great value on relationships, emphasizing the significance of incorporating an omnichannel approach that includes traditional advice. Research indicates that 46% of GenZers desire their agent or broker to guide them in making decisions, highlighting the need for personalized and expert assistance.
However, the industry may face the challenge of fear in conveying the right messages. GenZ now possesses the financial capability to significantly contribute to insurers’ success, yet there is a reluctance to risk upsetting this cohort. Those responsible for creating content must be brave enough to communicate with them in a manner that aligns with their preferences. As Josh Hart aptly asked, “Are the insurers going to be brave enough to talk to them in the way they want to be spoken to?”
4. Influencers and social media speak their language
Have you ever heard of Maddie Ziegler, Molly-Mae Hague, Khaby Lame or Emma Chamberlain? GenZers trust influencers, they are obsessed with social media, and they spend all their time glued to their phones, their primary source of information. As Graham Gordon, P&C Product Director at Sapiens, simply put it: “They are a nightmare, at least for those insurers who are not able to communicate on their level and channels.”
On the other hand, it is important to note that 85% of GenZ feels underrepresented by the traditional advertising. This explains why they turn to influencers and social media for content consumption. How can this be applied to the insurance industry? As Robin Kiera of digital scouting points out, “They don’t want to know about your insurance products. They want to know how to get rich, how to get a good job, how to buy a house. That’s the content side. Then you need to put it in formats they consume, into channels where they are. Simply having the best whitepaper won’t work if it’s shared on Facebook, that is not where this customer group is. Insurers must be present where their target audience is”.
Kiera adds, “When you’re on a bus, subway, or airplane, take a look at what people are doing on their phones. Don’t rely solely on research findings, as they often lag behind. Look what there is”. To effectively engage GenZers, insurers should focus on topics that align with their interests. As a health insurer or wealth manager, there is plenty of knowledge to share. Establishing trust by demonstrating expertise in areas that matter to them can be a powerful approach to capturing their attention and loyalty.