Insurers are currently working overtime to understand Generation Z and formulate strategies to optimize this segment’s lucrative potential. Generation Z, the generation of people (after millennials, who are also called “Generation Y”) who were born from the mid-1990s to the current day, has forced its way onto insurers’ agendas through sheer demographics and spending power.
The global Gen Z population is expected to reach 2.6 billion by 2020 and they have access to $44 billion in buying power, according to the National Retail Federation.
Some facts about Generation Z are rather obvious. Of course these young people, who were born into a connected world, expect instant and personalized service across channels. But there are also some possible misconceptions about Gen Z on the part of insurers.
Generation Z is plugged in, but insurers shouldn’t rush to jettison their call centers or agents just yet. When asked, “How do you purchase auto insurance?”, 55 percent of Generation Z answered, “In person.” This compares to only 37 percent of millennials who gave the same answer.
The perception of social media usage has led to another possible misconception. While it’s true that Generation Z loves social media, they are also more cautious than you might expect because they’ve seen many members of Gen Y get burned by scandal or unwanted exposure, according to Lindsay Insurance Group. Many Gen Zers have left or are leaving traditional social media channels such as Facebook, and instead prefer some of the more anonymous apps (Whisper, etc.).
It’s early in the game, but insurers are beginning to use advanced analytics solutions to mine social media for data and actionable insights. Knowing which sites to focus on will be important.
Another possible misconception is that Generation Z hates driving/car ownership. There have been many articles pushing this angle and it’s true that many of them use services like Uber and Lyft heavily. And yet an article in USA Today noted that:
Some 92% of those surveyed among Generation Z, a generation loosely defined as being up to age 17 in the study, own or plan to own a vehicle — and they are excited about the possibility…
Property and casualty/general insurers can continue heavily targeting today’s young people with innovative and flexible offers.
Sapiens’ NEW infographic, The Keys to Generation Z for Insurers, can help you begin preparing to provide a unique insurance experience to Gen Z. It offers six important Gen Z takeaways for insurers and outlines good first steps for maximizing this big opportunity.