The next generation of insurance consumers- What do they want?

April 6, 2022

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RHI Agency Team

Customers who buy insurance do not have complicated requirements. They want to select from a wide range of insurance at reasonable pricing. They want information that is clear and transparent, as well as interactions that are simple and painless. When customers file a claim after an accident, theft, or injury, they expect their insurance to help ease their worry rather than add to it. In addition, customers are increasingly expecting their insurers to provide additional services such as roadside assistance and advice on living a healthy lifestyle.

Customers’ confidence and loyalty are earned by a small number of established insurers who accomplish all these things properly. However, the painful reality is that most insurance firms still fail to consistently provide their clients’ value. They fail to differentiate themselves and frequently wind up competing on price, with items that appear to be commodities from consumers’ perspectives. 

It’s no surprise, then, that an increasing number of consumers shop for policies on aggregator sites or that insurtechs and other sector newcomers are gaining popularity in the marketplace. To keep up with the market and be a next-generation digital insurer, companies must embrace agile and open digital technologies to provide a unified customer experience and understand the evolving needs of the consumers. Today, insurance consumers are straightforward about what makes them feel good and will shop. 

How important is Gen Z in the insurance sector?

Is it hard to believe if we say that Gen Z and millennials will make up 75% of the workforce in just a couple of years? That means that by 2025, the vast majority of working-age people will have been born after 1980! You’re not the only one who was taken aback when you read that. As these younger generations enter the labor sector, they also start to make big life decisions such as purchasing a car or a home. While each age introduces new ideas and technology, one constant endures — the necessity for insurance.

So, what is it that the younger consumers want? The answer is simple. This generation has grown up in a more technologically advanced period, and they want everything faster, easier, and better. Be it services or products, consumers are not lowering expectations, and they would like the companies to adapt to their wants. This right here is the key to winning over the new-age insurance consumers. 

Top-notch customer service

No matter how tech-forward you are, nothing and nobody can negate the importance of good customer service. When it comes to purchasing decisions, all generations, even Millennials, and Generation Z, place a premium on customer service. Young people enjoy swift responses from customer service representatives who quickly get to the bottom of a problem. While consumers want these solutions delivered through technology, they also wish to live agent contact, which means no more sitting for hours on hold with a chat robot before dealing with an actual human. For enhanced customer-centric experience, insurance companies can:

  • Provide a frictionless omnichannel approach that allows customers to communicate with the company via any device at any time, such as SMS, WhatsApp, or Facebook Messenger, to name a few.
  • Provide a personalized strategy in which business operations are intelligently adjusted to the individual features of a single consumer, as well as a self-service capabilities interface.
  • Use API technology to simplify connectivity between the many components throughout the value chain and promote data enrichment and external data sources.
  • Create an ecosystem that enables incorporating new and innovative technologies as part of the overall design.
  • Use advanced analytics to drive customer journey and engagement based on key performance indicators.

Automation and Digitization

New Generation is constantly exposed to new technology. It isn’t easy to meet a young person today who does not own a smartphone. Growing up with innovative technology means that younger generations are accustomed to the speed and efficiency of online shopping and smartphone apps, so it stands to reason that they appreciate the same characteristics when it comes to purchasing insurance.

With their poor speeds and inability to integrate, the legacy systems that many insurance businesses still utilize will not impress the younger generations. Instead, new customers will go toward insurance companies with updated designs and processes that make it easy to use and deliver rapid gratification.

Convenience

We have already said that getting work done comfortably tops the chart. Convenience is a significant consideration for younger generations when it comes to insurance. These customers want good service at their fingertips, whether it’s through innovative technology or 24/7 customer service. Younger generations seek insurance companies who tailor processes such as making a claim or receiving a quote to their requirements. Offering uniquely personalized services and experiences is as significant, if not more, in their purchasing decision, than price. Young people want policies that are easy to implement and don’t include any extraneous bells and whistles that will go to waste.

Concern for environmental and social change

When deciding where to spend their money, younger generations also evaluate its environmental and social impact. Consumers who are socially and ecologically conscious recognize the impact their business (or non-business) can have on making change and take matters into their own hands by investing in firms with robust environmental and social impact strategies. Insurance companies (significantly larger ones) that do not decrease their carbon footprint and speak out against injustice will undoubtedly lose market share as the relevance of these variables in young people’s purchasing decisions grows.

 

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