Raised in a digital world, Gen Z will require truly digital insurance offerings and new demand-generation techniques

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Gen Z will prefer a complete digital experience with access to all products and services via a digital platform of choice.

New generation, new preferences

The insurance industry must recognize the needs and preferences of an emerging generation of policyholders and decision-makers. The up-and-coming Generation Z is predicted to surpass Generation Y (millennials) by volume this year.[1] Using data from the United Nations, Bloomberg predicts that Gen Z will make up 32% of the 7.7 billion global population in 2019, nudging ahead of millennials, who will account for a 31.5% share.[2] This younger post-millennial generation has also been dubbed the Synthetic Generation because its preferences have been shaped by a combination of physical and digital realities, according to a recent report.[3]

Gen Z collects and cross-references information and integrates virtual and offline experiences. It perceives digital as a way of life – as members leverage digital channels to connect with people, and share views about anything and everything – including insurance coverage. Online reviews or comments shared by peer group influencers often shape Gen Z decisions.

Post-millennial profile: Generation Z

Source: Capgemini Financial Services Analysis, 2019; The Synthetic Generation, Sogeti Labs, Capgemini

Rising demand for digital transaction channels

Not surprisingly, transactions via digital channels are becoming increasingly popular, and the pace of adoption is on the rise. More than half of insurance customers (nearly 52%) interviewed as part of the World Insurance Report (WIR) 2018 placed high importance on mobile, internet, or website channels for conducting insurance transactions.[1]

As a natural progression, Generation Z will likely prefer a complete digital experience with access to all products and services via a digital platform of choice. Interconnectivity, personalization, and seamless omnichannel access will transition from good-to-have to must-have value-added services.

To speak the language of Gen Z, offerings must be truly digital

Generation Z never experienced a world without smart digital technology and the internet. Therefore, insurers must provide seamless omnichannel access and meet new-generation expectations by simplifying existing products and processes to create relatable offerings available for purchase with a few online clicks. Policy details, including coverage and expenses, should be straightforward and written in everyday language. Additionally, policy standardization across plans will support comprehensive coverage and make buy/no-buy decisions easier. What’s more, underlying processes must be automated to enable a seamless purchase.

Demand generation that resonates with Gen Z

As insurance transactions go fully-digital, traditional demand-generation methods must also change. Gamification and interactive videos are tools that merit exploration as well as new avenues (including social channels) that educate customers about risks, coverage updates, and policy details. The ability to drive meaningful discussions via the platforms used most by new-generation customers will be critical for insurers aiming to improve promotional campaign effectiveness and awareness.

Savvy insurers will bundle their offerings with non-industry products to drive interest at the point-of-sale. For example, mobile insurance tied with mobile phone purchase, travel insurance bundled with an Uber trip, a short-term on-demand insurance policy packaged with an adventure trip.

How will bundling support sales? Customers are more likely to buy insurance when the value and risks associated with an offering are top of mind, such as at the time of purchase.

Moreover, when insurers actively collaborate with multiple industries, they create an ecosystem to provide an array of offerings from which customers can purchase products and services from the platform of their choice. The ecosystem creates multiple customer touchpoints, which can supply valuable data about customer preferences to help insurers personalize their offerings.

Built around ecosystems, the marketplace of the future can enable insurers to meet the needs and preferences of hyper-connected, passionate, and tech-savvy Generation Z – and stay competitive and profitable.

Are you interested in learning more about the insurance marketplace of the future? Be sure to download a copy of the World InsurTech Report 2019,  beginning Monday, October 7, for a variety of transformational success strategies.

 

 

[1] Individuals born between 1981 and 1996 (ages 23 to 38 in 2019) are considered to be a Gen X millennial, and those born from 1997 onward are part of the new Generation Z, Pew Research Center, https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins.

[2] Bloomberg, “Gen Z Is Set to Outnumber Millennials Within a Year,” Lee J. Miller, Wei Lu, August 20, 2018, https://www.bloomberg.com/news/articles/2018-08-20/gen-z-to-outnumber-millennials-within-a-year-demographic-trends

[3] Sogeti Labs |Capgemini, “New Report Alert: The Synthetic Generation,” Menno Van Doorn, February 28, 2019, https://labs.sogeti.com/new-report-synthetic-generation

[4] Capgemini |Efma, “World Insurance Report 2018,” May 22, 2018, https://worldinsurancereport.com/resources/world-insurance-report-2018

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