How Gen Z and Gen Alpha will reshape the insurance industry

Thursday, September 21, 2023

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Embracing the digital landscape is crucial for insurance brokers and agents

By BrokerTech Ventures

Over the last decade, millennials have been the driving force in our culture, shaping workplace dynamics, consumer trends, technology, and e-commerce. As more millennials enter their 40s, members of the post-millennial generation, known as Generation Z or “Zoomers,” are aging into adulthood, joining the workforce, starting families, and developing their own distinct needs and attitudes. As digital natives, they are part of the first generation to grow up in the age of interactive screens. The generation that follows the Zoomers, known as Gen Alpha, will likely be even more entrenched in technology than its predecessors.

As Zoomers and Gen Alpha become part of the labor force and the customer base, their needs and wants will cause significant shifts in the way insurance is marketed and delivered. 

“Serving the needs of these generations will be crucial to market growth,” said Ali Payne, President of Employee Experience at ethOs, a Holmes Murphy Company. EthOs focuses on improving workplace culture, engaging with multi-generational staff and addressing all aspects of an employee’s total well-being.

"We need to be proactive, because in many ways, the insurance industry has been slow to change,” Payne said. “We still have some of the same workflows and processes that were in place when baby boomers were running the industry.”

The impact of Gen Z and Gen Alpha

“First of all, it’s important to note that even the oldest Gen Zer is new to insurance,” Payne said. “They are just turning 26, so for health insurance, they may be aging off their parent’s health coverage. Much of this is new to them. Their expectation is to interact with businesses online, through websites, apps, and social media. You may have guessed, everything they need is on their phone. They want easier, faster, and simpler delivery. Also, they want a personalized approach. They want ‘the right thing for me, right now.’ In other words, unless they’re actively using it, they’re probably not paying much attention to it. They probably know how much it costs, and that’s about it. What’s more, they’re willing to shop it every year.”

Payne isn’t the only one thinking of the upcoming generational changes. John Prichard Jr, Chief Advancement Officer at Heffernan Insurance Brokers and a member of BrokerTech Ventures recently shared, “Presently, the majority of our clients exhibit minimal interest in utilizing a self-service portal. However, as a new generation of business leaders evolve, we anticipate a shift in this trend. It is crucial to note that we do not expect the majority of individuals to seek a self-service approach; however, they may expect improved avenues of collaboration, streamlined interactions, and elevated productivity through a contemporary lens.”

How the preferences of Gen Z and Gen Alpha may push the insurance industry to adapt 

Some potential changes, driven by the needs of younger decision makers are: 

  • Digital-centric engagement. Agents and brokers will need to invest in robust online platforms that provide easy access to information and services, with self-service options for processes like claims filing, underwriting, and policy management. 
  • Mobile-first approach. To market to Zoomers, insurers need to understand how inseparable this generation is with mobile technology. It’s not enough to be mobile-friendly. The user experience on mobile devices must be seamless and easy to navigate. Self-service platforms must be intuitive and optimized for smartphones and tablets. 
  • Transparency and accessibility. Gen Z values transparency and expects easy access to information. Build trust by being transparent about policy terms, coverage details, and pricing. Avoid hidden fees or complex jargon.
  • Cybersecurity and privacy. Growing up in an era of frequent data breaches and online threats, these generations are likely to be more vigilant about cybersecurity and privacy. Insurers will need to invest in well-built security measures to protect customer information.
  • Virtual and augmented reality. As technology advances, virtual and augmented reality may become important tools for insurance companies. These technologies can be used for virtual property inspections, risk assessments, and even to guide customers through the claims process.
  • Automation and AI-driven services. Gen Z is likely to be comfortable with the integration of artificial intelligence (AI) and automation in insurance processes. This could include chatbots for customer service, AI-powered underwriting, and automated claims processing to provide real-time assistance and answer common queries.
  • Data-driven underwriting. These generations may be more comfortable with sharing personal data in exchange for more accurate and personalized insurance offerings. This could lead to the development of more sophisticated underwriting models based on real-time data and analytics.
  • Social media influence. Insurance companies will need to have a strong online presence, and they may also need to consider partnerships with influencers or platforms that resonate with this generations.
  • Emphasis on sustainability and ethics. Gen Z tends to be more environmentally conscious and socially responsible. Insurance companies that incorporate sustainable practices and demonstrate a commitment to ethical business conduct are likely to appeal to this generation.

Embracing digital transformation and staying attuned to the evolving needs of this generation will be crucial for the long-term success of insurance agents and brokers, Payne said.

“Everybody is trying to simplify the experience that is insurance,” she added. “It’s why Holmes Murphy is so vested in BrokerTech Ventures, and … using technology to drive change or to re-invigorate what currently exists. How do we simplify the process? How do we take the paper out of insurance? How do we do more with less? Ultimately, all this work will trickle down to better solutions for Gen Z and Gen Alpha.”

Thursday, September 21, 2023