As we inch closer to 2023, it is time to understand and acknowledge the fact that Gen Z & Millennials modern insurance are effectively becoming financially independent adults. A critical part of growing up is addressing their growing need for adequate insurance products. Insurers are at a crossroads where they must adapt and improve their processes to cater to the changing industry landscape as Gen Z & Millennials become the predominant part of the population.
It’s essential for modern insurers, who are also increasingly composed of Gen Z & Millennials, to understand the insurance needs of the new generations and how they can use digital innovation to encourage them to purchase insurance products.
Why Should Insurers Target Gen Z & Millennials?
Statistics published by Pew Research show that millennials turned 26-41 in 2022, and the Gen Z population is entering the age range of 10-25 years. All millennials and a significant portion of people from the Gen Z generation are entering the workforce. As they enter the life stage where they need coverage, insurers must capitalize on it.
The target market in the coming years for insurers will consist primarily of these two groups, and insurers must adapt to strategies relevant to Gen Z & Millennials modern insurance marketing trends and identify more effective ways to get through to Gen Z & Millennial populations. Adopting tech-driven innovations and transforming legacy systems to embrace modern solutions will be critical to the insurance industry.
What Are the Major Insurance Trends Resonating With Gen Z & Millennials?
It’s clear that the financial services industry at large must identify methods to effectively engage with and deliver more effective results for Gen Z & Millennials. Speaking from the Millennial perspective, here is an overview of what Gen Z & Millennials look for in insurance amid the rise of digital adoption:
A Completely Digital Experience
A significant change in consumer behavior is the aversion to paperwork. A major reason for the new generation’s frustration with the legacy insurance industry processes is an overwhelming amount of paperwork. It can often lead to them foregoing insurance altogether. Alongside it, complex and sophisticated processes contribute to their reluctance to get insurance. Simplified digital experiences for the “digital native” population can make the process more accessible and amenable for the growing Gen Z and Millennial customer base.
Better Types of Coverage
Innovation in insurance tech is underway, and many new insurance startups driven by tech innovations are adapting to the changing needs of new generations. A study observed that 31% of American Millennials with pets are more likely to invest in pet insurance. Enhancing existing policies can be another method to achieve that goal. Covering accidental damage to someone’s personal property becoming a part of home insurance policies can also encourage positive sentiment toward insurance.
Flexibility & Personalization
Traditional insurance policies often provide coverage that might not be relevant to every customer. Millennials and Gen Z are gaining a reputation for being smarter with money. Carefully budgeting and offering flexible policies to better suit client-specific situations are becoming key parts of modern insurance policies.
How Can Insurance Tech Innovation Help Engage Gen Z & Millennials?
The banking and investment behavior of the new generation is much different than that of Generation X and baby boomer populations. A recent Gallup poll shows millennials are not engaging as much with insurance as previous generations. It represents a challenge for insurers to make fundamental changes to help them connect with and sell insurance to these populations.
Gen Z & Millennials attitudes are shaped by their upbringing in a modern and digital era. They are more mobile-centric and use various technological platforms as an integral part of their lives. As such, 2021 was a great year for “insurtech” startups. A few of the major insurtechs using insurance tech innovation to engage with and sell insurance to Gen Z & Millennials include:
• Hedvig: It is a home and auto insurance insurtech company offering digital insurance that covers “clumsiness” as part of its policies. From providing coverage to the damage done to laptops for spilling coffee to breaking glasses because one sat down on them, the company takes a more appealing approach to address modern insurance coverage needs.
• Dalma: It is a simplified digital insurance platform offering coverage for pets. The company also offers its customers access to help centers that connect them with vets for recommendations and to answer questions.
• Dead Happy: It is a digital life insurtech solution offering flexible payment plans for Gen Z & Millennials, making digital life insurance policies more affordable. In a matter of a few steps that take very little time, the insurance company offers them easy access to insurance products suitable for their coverage needs and budgets.
The key commonality among all three is a distinct approach to providing digitized insurance solutions that simplify the process of getting insurance, offer new solutions appealing to the changing coverage needs, and better flexibility in pricing to make insurance more affordable. At Wesurance, we believe that insurtech innovation will effectively result in the complete transformation of the insurance industry into a digital experience. There is already a lot of brilliant work being done in the insurance industry to help it go digital, and Wesurance has created a platform to further that innovation.
Wesurance is a UK-based Insurtech company that offers a platform for insurance companies and brokers to create and sell Insurance eCommerce. Build digital insurance without IT assistance using a drag-and-drop platform. Find out more here.