Cracking the code: How the insurance industry can win over Gen Z

Independent Singapore

2 days ago

As Gen Z, those born between 1997 and 2012, enter maturity, it's restructuring industries worldwide. Branded for their tech eloquence, realistic financial behaviours, and social cognisance and responsiveness, this generation has become the most dominant consumer group. However, despite their expanding economic leverage, there is one industry that's struggling to connect with them—insurance.
Many studies expose a conspicuous gap between Gen Z and those within the insurance industry. With Gen Z's acceptance rates and deep-seated cynicism, it's obvious that the conventional approach is not working. However, this challenge also presents a significant opportunity if the industry is prepared to adapt and evolve. A generation largely uninsured
According to a 2024 study by the National Association of Insurance Commissioners (NAIC) featured in a recent article from Finance Yahoo, less than 21% of Gen Z adults have renters' insurance. The numbers decrease even further with other major products—only 5% have contents insurance, 24% have life insurance, and 30% have travel insurance.
This gap is not merely because of indifference. Since Gen Z individuals are evolving in an environment fraught with economic uncertainties, grappling with rising housing costs, student loan debts, and a volatile job market, insurance becomes a distant concern, a luxury they're considering getting 'someday.' Trust gap and why traditional insurance falls flat
Gen Z's unwillingness also came from a profound distrust of legacy financial organisations. Having matured during economic recessions and amid online half-truths, many view underwriters as multifaceted, profit-driven individuals who are difficult to deal with and even harder to trust.
There is also a prevalent opinion that insurance is something you need later, once you have a loan, start a family, or develop health problems. Until then, it's easy to depend on the mentality of 'I'll deal with it if something happens.' As a consequence, many Gen Z-ers either postpone insurance decisions or completely disregard them. Bridging the gap with education and digital innovation
Approximately two-thirds of Gen Z mention a lack of knowledge and understanding about getting insurance. Likewise, trust is a key barrier to buying one. Even more disturbing, 48.1% of them say that they never think about insurance at all or assume it's already covered in the apps and services they're using. See also Guide to Health Insurance Plans in Singapore (2023)
To alter these scenarios, insurance providers must meet Gen Z where they are—online. Affiliating with content makers on platforms such as Instagram, TikTok, and YouTube could help clarify and interpret the fine print. Quick, relevant videos on topics such as how deductibles work or why renters' insurance is important can have a huge influence. Simplify, digitise, and humanise
Gen Zers are not anti-insurance—they merely can't see themselves in the way it's presently promoted or designed. With low homeownership rates, economic setbacks, and a preference for speedy, user-friendly digital solutions, they need insurance that feels relevant, accessible, manageable, and reliable.
The industry has a fundamental choice to make—continue with 'business as usual,' or advance and transform into a space that speaks directly to this generation. This is not just about transforming a brand; it's a call for an in-depth modification, one that streamlines, digitises, and, most significantly, personalises how insurance is made available.