Insuring the Future: How Gen Z Digital Natives Are Transforming Insurance

Generation Z insurance consumers – or those born between roughly 1997 and 2012 – want the insurance process to be authentic, honest, and immediate. That’s according to guests on The Insuring Cyber Podcast’s quarterly InsurTech update episode.

“Gen Z really wants those effortless digital experiences, and they really want the option to purchase or service their policies on their own,” said Bobbie Collies, chief growth officer at Coterie Insurance.

She said this could mean adapting to a mobile-friendly user experience or finding the right technology to meet consumers’ needs no matter what, even if it’s at 2 a.m.

“I think [traditional insurers] can learn from not only InsurTechs, but also other industries, that people want to do business when they want to do business, and that might mean purchasing insurance late at night or over the weekend when most carriers aren’t open for business. Or they might want to generate a certificate of insurance at two o’clock in the morning,” she said. “We really have to listen to what the customers want and then try to figure out how we use the technology to deliver that.”

Effi Fuks Leichtag, chief product officer at NEXT Insurance, agreed that Gen Z consumers want access to insurance wherever and whenever.

“The number one thing about being attractive to Gen Z is to be able to fulfill their need the moment that desire comes over,” he said. “If it’s 2 a.m. on a Friday and you need insurance, you need to be able to fill that.”

He added that patience in younger generations is much shorter, and that’s because expectations for immediacy have already been set in such a tech-driven age.

“When you think about it, if you return an Amazon product, you now can just click a button. You no longer need to even to print the UPS receipt or whatever it is,” he said. “I think those expectations are now everywhere. I want my food delivery within minutes. I want my certificate of insurance within seconds.”

This means challenges for traditional insurers who have operated at a slower pace and are finding themselves needing to play catch up, he said.

“The terminal speed of the [insurance] industry is much slower, so if you bring [insurance to] Gen Z, if you allow them to buy directly, immediately, that expectation stays throughout the lifetime. They want the rest immediately, and you need to be able to fulfill that,” he said. “So there’s an interesting challenge that we’re kind of overcoming. I think insurance will have to catch up in terms of customer expectations.”

However, Collies said that as a relationship driven industry and one that can often be complicated to understand from the outside, a balance also needs to be struck in insurance.

“Insurance isn’t an easy product to buy, right? It’s not like we’re buying shoes or jumping on Amazon and throwing a few things in our cart and then we’re out the door. So that’s the reason why we still engage with independent agents and brokers,” she said. “I think even a few years ago, not even Gen Z in general, but insurance buyers typically like to start their insurance buying process online. And then at a certain point in time, they don’t feel comfortable kind of closing the deal until they talk to a professional because it’s contract and it’s complex and there are different coverages that are needed depending on the risk at hand.”

Indeed, contract language can be confusing and policies themselves can be difficult to decipher without the help of an insurance professional, she added.

“That’s kind of the nature of our business. So we found that even a lot of folks that try to attempt to buy insurance online, they back out when they need more help. And that’s where the human touch really needs to continue with agents and brokers or resources to be trusted advisors for these potential insureds,” she said. “From that standpoint, I think there’s that true balance between when is a moment within this buying journey and even the servicing journey when it is able to be digitized, when do customers want to digitize, and when do they really want to speak with someone?”

That said, that human touch is evolving as well from exclusively face-to-face interactions toward connections that can be fostered online.

“Insurance continues to be an industry that’s built on people, networking, and relationships. [Coterie] really tried to hone in on this and demonstrate that InsurTechs aren’t just cutting out the people and digitizing everything. It’s about creating technology that’s supplementing the people that we have working with our partners as well as our policyholders,” she said. “I think as the future of the industry changes, we really have to cater how we reach Gen Z and younger generations for both recruitment purposes as well as marketing for business development and acquisition.”

Part of this method is using technology and social media to deliver authenticity, she said.

“I think when you think about the Gen Z generation and what’s really important to them, top of mind is transparency, being authentic, being involved,” she said. “They’re watching how companies are integrating themselves into current trends and into the news. And I think as you engage with younger audiences, authenticity, honesty, are really top of mind for Gen Z, and letting your brand and your users and partners speak really openly and freely for you on your behalf versus kind of telling everybody what you think you are is really important.”

Another InsurTech that has honed in on this strategy is NEXT Insurance. With more than 145 thousand followers on TikTok and some videos racking up millions of views, it appears the company is doing well with its mission of allowing its small business consumers to speak on behalf of NEXT through authentic storytelling.

“Eventually, people want to see content that they can relate to that is interesting. And when I say interesting, it can be informational. Providing information can be exciting, it can be emotional, and even though insurance and especially business insurance is not necessarily as enticing as a TV show, you can still make it interesting,” Fuks Leichtag said. “You can still make it really fitting to the platform and tell a story and make it convincing and make it great.”

He said this is particularly useful as younger generations of insurance buyers are increasingly turning to social media platforms for information. In fact, a recent Bindable report, titled Future-Focused Insurance: Inside the Minds of Emerging Insurance Consumers, surveyed millennials and Gen Z about their insurance buying habits and found that almost half – 40% – said they consult social media when researching insurance online. 69 percent of these respondents said they pay attention to social media influencers and are 54 percent more likely to purchase products from brands that partner with influencers they follow.

“I know there’s areas of mistrust and manipulation, but honestly, [social media] is a really good source to see what’s happening out there,” he said. “I search on YouTube and TikTok whenever I want something that is comprehensive and easy before I make a decision.”

Fuks Leichtag echoed Collies’ thoughts about authenticity among younger generations of insurance buyers as well, stating that Gen Z is particularly good at separating what is good and honest.

“Bad news spreads like fire and good news spreads like fire because social media connects everyone so efficiently, so I think being a good business with a good reputation – I would say faster than ever among this generation – accelerates your ability to grow as a business,” he said.

With this in mind, what is his advice to insurers looking to harness the power of social media?

“Be a good business because bad businesses are discovered faster and good businesses are growing much faster, and I think that’s kind of the secret as you work online with [Gen Z consumers],” he said. “I think the ones who are adapting to the authenticity that this generation requires are going to be the winners.”

Collies added that insurers will also need to adapt to the immediacy and efficiency that has been set as a precedent by other tech-driven industries.

“Insurance really no longer has any excuses to be rooted in old, antiquated systems,” she said.

Check out the rest of the episode to hear what else Bobbie and Effi had to say, and be sure to check back for new episodes of The Insuring Cyber Podcast publishing every other Wednesday along with the Insuring Cyber newsletter. Thanks for listening.