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Coming of Age: How Gen Z is Transforming Insurance

By December 10, 2022February 21st, 2024Conversational AI, InsurTech7 mins read
Generation Z & Insurance Industries

Introduction

As a generation, Gen Z is different from any that have come before and their life journeys have not followed the traditional path set by older generations. They are digital natives who have grown up in a world of instant gratification and constant change. And when it comes to their insurance needs, they are no different.

The Gen Z population desires a holistic customer experience—where digital offerings bring together products and services to help the customer manage their lives. When insurers can’t deliver that view, a gap arises between customer expectations and what insurers are delivering. Insurers need to prioritize the needs of this generation to establish themselves as trusted insurers to an aging Gen Z in the future.

Changing Insurance Landscape

From new insurance products to evolving customer needs, the insurance landscape is constantly changing. And as the needs of Gen Z customers change, so too will the insurance landscape.

Here are some of the ways that the insurance landscape is changing:

1. New Insurance Products: As customer needs change, so do the products that they demand. insurers are always looking to develop new products that meet the changing needs of their customers. For example, high percentages of Gen Z are single and living with pets. A vast majority of them are looking for products that allow them to insure their pets today and so other products such as family insurance plans are irrelevant to them.

2. Evolving Customer Needs: The needs of Gen Z customers are constantly evolving. As such, insurers must be prepared to adapt their products and services to meet these changing needs. They look for plans that specifically address their individual needs and are also ready to share personal data that support these plans. For example, a Gen Z customer investing in health insurance wants to be able to eliminate coverage they do not need and be able to reduce the cost of their premiums overall.

3. Technology: Technology is playing an increasingly important role in the insurance landscape. From online quoting and policy management to telematics and drones, insurers are using technology to improve their operations and better serve their customers.

What does Gen Z look for in insurance?

As the first generation to grow up with the internet, Gen Z has a different perspective on insurance than their previous generations. Gen Z’s life journeys have not followed the traditional path set by older generations. They have made other significant lifestyle shifts from older generations that result in different risk needs that require different insurance needs.

Gen Z expects insurance companies to develop in a direction that is favorable to them, aiding them in supporting the challenges of life – both individual and global. Maintaining relevance with this critical consumer group requires insurance companies to deliver comprehensive added value within their policies. Adapting tech-dependent business models is a necessity for insurers if this generation’s desire for digital individuality and flexibility is to be met, particularly during a time when younger people tend to lose interest in insurance.

Here are some of the expectations younger generations have from their insurers:

Digital Experience

As the first generation to grow up with digital technology, Gen Z has high expectations for the digital experiences they have with brands. A study by Accenture found that 78% of Gen Z consumers said they would leave a brand they love after just one bad experience.

This generation expects to be able to purchase insurance online and have 24/7 access to their account information. They also want to be able to contact their insurer through digital channels such as chat, email, or social media.

To meet the needs of this tech-savvy generation, insurers need to provide a seamless, omnichannel customer experience. This means being available across all channels, from social media to chatbots to in-person customer service.

Hyper-personalization

Accenture found that 62% of Gen Zers said they were more likely to buy insurance from a company that offers personalized services and prices. So, in addition to providing a great digital experience, insurers need to ensure they are tailoring their products and services to meet the unique needs of this generation.

One of the many reasons younger generations cite for being uninsured is cost. Traditional policies often include coverage that doesn’t apply to the customer’s personal situation and on top of that, are often costlier.

Hyper-personalization is the process of using data to create highly personalized experiences for customers. With this approach, insurers can personalize all insurance processes from customizing an insurance policy to fit an individual’s needs to provide real-time updates on claims status.

Hyper-personalization is becoming increasingly important, especially for Gen Zers who have grown up with technology. According to a recent study, 78% of Gen Zers say they’re more likely to purchase from a company that offers a personalized experience.

There are a few things insurers can do to provide a more personalized experience for their Gen-Z customers:

1. Use data to understand customer needs: Insurers should analyze data on their customers in order to better understand their needs. This data can be used to develop products and services that meet customer needs and expectations.

2. Personalize Communications: Insurers should use customer data to personalize communications and interactions. For example, if an insurer knows that a customer has recently had a baby, they could send them information on life insurance policies that would benefit their family.

3. Offer real-time updates: Customers appreciate being kept in the loop, especially when it comes to their insurance claims. By offering real-time updates on claim status, insurers can make customers feel like they are part of the insurance journey and ensure transparency.

Self-service with Conversational AI

Conversational AI is revolutionizing the way insurance companies interact with their customers. By providing a self-service option that can handle simple tasks, Conversational AI frees up customer service representatives to handle more complex inquiries. This results in shorter wait times and happier customers.

Insurance companies are able to provide a better customer experience by using Conversational AI to handle routine tasks such as answering FAQs, scheduling appointments, and even processing claims. This allows customer service representatives to focus on more complicated issues, resulting in shorter wait times for customers. In addition, Conversational AI can provide a more personalized experience by engaging with customers in natural, human-like conversations.

By offering a self-service option with Conversational AI in insurance, companies have the opportunity to improve the customer experience while reducing costs. This technology is revolutionizing the way insurance companies interact with their customers and is poised to change the industry for years to come.

Product Knowledge Base

With a product knowledge repository, insurers can allow consumers to make informed decisions about the products they purchase and use. The insurance industry has been notoriously opaque, making it difficult for consumers to comparison-shop and understand what they’re buying. But that’s starting to change, thanks in part to digital tools like an online knowledge base that makes it easier for companies to be transparent about their products.

With the recent advancements in InsurTech, insurers can provide online customer portals that show consumers different coverage options and prices side-by-side and technology that provides customers with real-time insights into their claims history or the status of their policy.

As the insurance industry continues to evolve, product transparency will become increasingly important. Insurers that embrace transparency will be better positioned to win over price-conscious consumers who want to know exactly what they’re getting for their money.

Faster Claims Processing

As the world becomes increasingly digitized, customers are demanding faster claims processing from their insurance providers. And rightfully so – when you’ve been in an accident or your home has been damaged, the last thing you want is to wait for weeks or even months to settle your claim.

Fortunately, many insurance companies are starting to catch on to this customer need and are working to speed up their claims process. For example, by accessing an active customer portal through a mobile app, customers can upload photos and start their claims right from their phones and also help process claims faster with the help of AI and ML models.

Conclusion

Regardless of whether an insurer is traditional or considered InsurTech, those that make Gen Z feel safe in a world of risk will win over the world’s first generation of digital natives. Ultimately, Gen Z will be drawn to companies that evoke transparency and authenticity. This is an exciting time for insurers to build new relationships and it is imperative to exploit these opportunities with the help of smart tools and stay ahead of the competition. Get in touch with our experts at purpleSlate today to evaluate your InsurTech needs and proactively shift with these ever-evolving advancements.

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