Gen Z Trends in Insurance: How Zoomers are Crucial to Market Growth
Are you looking for an edge in the insurance market? It's time to tap into Gen Z consumers, also known as Zoomers, since they're a growing source of potential customers changing how people approach investing, insurance, and long-term savings. As the latest generation to join adult life, Zoomers are making their mark on the financial landscape by their unique standards, having developed distinct needs and attitudes that can make all the difference when securing profits. See how capitalizing on Gen Z's uniqueness can skyrocket your success in the insurance industry and propel growth within your organization. You'll also discover what makes Gen Z stand out from previous generations and what changes may be necessary. As Zoomers increasingly become part of the labor force and customer base — trust us: if you work in insurance (or entrepreneurship more generally), understanding these nuances should be at the top of your priority list.
Who are Gen Z, and why is this generation so crucial for insurance companies?
In a rapidly changing world, it's no surprise that Generation Z plays an increasingly important role in the insurance industry. Born between the late 1990s and early 2010s, these young adults influence how insurers assess risks and design policies. As part of an ever-evolving insurance landscape, a closer look at Gen Z's impact will help us better understand their influence on future products and plans. From their progressive perspectives and tech-savviness, Gen Z has the potential to bring new ideas, cultural movements, and social change.
The impact of technology and digital marketing on Gen Z trends in insurance
Communication in our modern, digital world has experienced a massive overhaul due to the "iPhone Revolution." This revolutionary device was released when members of Gen Z were still young and impressionable. In their teenage years, these individuals found expressing themselves through phones easier than offline. As such, 55% believe the internet is more creative than offline experiences, while three out of five agree they feel less inhibited online than outside, away from screens. Insurers must recognize how inseparable mobile technology is for Zoomers if they want to market to them successfully.
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Their online behaviors demonstrate why insurers must focus their marketing efforts on mobile outreach to succeed in reaching this demographic. Going further into how Gen Z's reliance on technology impacts the insurance industry can help ensure companies can effectively engage with this growing market segment.
Gen Z vs Millenials: how Gen Z's demographics highlight their dynamic spending decisions
So why should insurers care about Gen Z? Well, Gen Z currently accounts for over 20% of the US population as of 2022, which comes out to be around 68.6 million people — a sizable portion of the population with 1 in 5 citizens being a member of Gen Z. As one of the most populated generations, Zoomers are also considered the nation's most diverse generation yet — dethroning the previous generation that held that title, Millenials.
They're a generation of pioneers, with each individual bringing an unprecedented level of diversity to the table. It's estimated that 26% are Hispanic, 14% Black, 6% Asian, and 5% come from all other backgrounds — making this group exceptionally inclusive in terms of ethnicity alone.
Gen Z is poised to have a significant economic impact this decade as the youngest generation of consumers. With much of their grandparents' Baby Boomer generation starting to pass down trillions in disposable income and over 80% of Gen Z parents reporting that they influence household spending decisions, it's no surprise this burgeoning demographic will be at the forefront of driving additional consumerism worldwide. This type of wealth transfer has already begun en masse since 2020 as Zoomers enter adulthood — setting up an interesting dynamic for how future generations will wield financial power within our economy.
Building a successful Gen Z insurance model: strategies to engage this generation
With the rise of fintech and innovation, Zoomers are embracing technology like never before. To get a glimpse into how this tech-savvy generation works with money, join us for an illuminating fireside chat with Aneesh Dhawan, CEO of Knit, discussing Gen Z's financial preferences and explores their unique behavior trends to find out what they need from modern financial services.
Increased trust in fintech companies
We're seeing more insurtech startups branding themselves creatively, zeroing in on Gen Zs' identity and concerns by offering specialized products. As Gen Z's spending increases, teenagers and young adults vote with their dollars and make a statement with brands that reflect their values.
Zoomers are beginning to emphasize brands that represent their values and make them feel included. This preference is especially evident in fintech, proving its superiority over traditional banking for Gen Z consumers — 51% named a fintech company as their most trusted financial brand compared to only 23% citing national banks.
The importance of fintech companies being trusted more than national banks for the insurance industry is paramount. These companies offer specialized products that cater to the identity and concerns of the Gen Z consumer. By providing tailored services and products that are more convenient to use, fintech companies have a greater chance of gaining trust and loyalty from this demographic.
In addition, fintech companies often provide faster feedback loops, innovative technology-driven solutions, and lower fees and commissions than traditional providers, and they can quickly adapt to consumer preferences. These features are especially attractive to the Gen Z consumer and make fintech companies desirable for insurance products and services.
Finally, digital channels such as social media, mobile apps, and online platforms allow for increased communication between insurers and potential customers. This facilitates greater trust-building between the insurer and the consumer.
Aspiring to make a difference? Gen Z consumers are well-attuned with sustainability and recognize it as essential to their buying decisions. One company leading the charge is Aspiration, whose digital banking platform encourages customers to help their wallet — and the planet. Investing in this holistic approach is sure to have lasting positive effects for future generations.
Diversity and equality
Gen Z is also leading the charge toward a more diverse and equal society. Nearly 1 in 5 adults of this generation identify as members of the LGBTQ+ community — twice that of Millennials, let alone older generations. Companies such as family planning platform Daylight have emerged, demonstrating their commitment to progress and offering services tailored specifically for LGBTQ+ users. Additionally, insurtech startup Lola Health has gone one step further, advocating for equality across health insurance offerings in France and launching a product for women and the LGBTQ+ community with backing from AXA — the world's largest insurance firm.
Rise of new channels
Due to the digital nature of Zoomers, they tend to prefer different media channels than previous generations — social media being one of them. In terms of which social platforms, Gen Zs prefer TikTok over the rest. As the fastest-growing social media app in the US, TikTok even dethroned Google's 15-year reign as the most visited web domain globally in 2021. The app currently has over a billion active users worldwide. And with many Gen Z preferring to search on social media platforms rather than web platforms like Google, the dominance of social media as the preferred distribution channel for reaching Gen Z consumers is clear. Businesses are beginning to meet their consumers where they spend most of their time by creating their social media accounts. Startups are leading the path in this new acquisition channel. NEXT Insurance is one of the most followed insurtech startups on TikTok, with over 130 thousand followers and numerous videos viewed over a million times each.
The immense popularity of State Farm’s Jake from State Farm TikTok account signifies a significant shift in the Gen Z insurance trends. With over 2 million followers, their account has gained a massive following among Gen Z, a demographic that previously showed scant interest in insurance. The insurer's humorous and relatable content has helped break down traditional insurance stereotypes and sparked a renewed interest in the industry. This trend indicates that Gen Z is looking for more personalized and engaging ways to interact with insurance providers, making a significant push towards digitized services that better serve their needs. Therefore, it is imperative for insurance companies to acknowledge the influence of social media and TikTok in their marketing strategies to appeal more to this new generation of buyers.
Gen Z is a powerful consumer demographic, and companies have taken note. With 88% of this generation following social media influencers, many startups now work with various digital superstars in the hopes of reaching out to their prized customer base through voices they recognize and trust. Step is one such company, an app-based bank for teenagers that has collaborated with some of the top influencers on TikTok, like 18-year-old Charli D'Amelio, the most followed influencer on the platform with over 150 million followers. By leveraging influencer marketing, businesses can reduce their customer acquisition costs through increased brand and product awareness, leading to higher conversions and, ultimately, an increase in sales. Additionally, using influencers can create more trust and credibility for a brand, leading to a rise in the quality of leads and customers gained.
Future Gen Z trends in insurance — what we can expect in the coming years
As Gen Z comes of age in the digital landscape, they're vulnerable to exploitation by nefarious actors. Technology has given malicious third parties new opportunities for financial gain through malware, ransomware, and communication interception — all with one goal: accessing valuable personal data. Contrary to popular belief, Gen Xers, Millennials, and Zoomers are 34% more likely to become victims of fraud than those over 60 (i.e., Boomers and Silent Generation). Fraudulent activities such as false giveaways, fabricated online romances, and bad actors run rampant on metaverse platforms like Roblox — where a staggering two-thirds of US kids between 9-12 can be found. It pays for this tech-savvy generation to stay wise around these deceptive practices.
Because of many emerging risks that Gen Z faces, particularly in personal cybersecurity, Zoomer consumers and their parents are flocking to startups like Agency to provide them with safety during their constant online experiences. Agency works as a digital security suite that protects the entire digital life of customers, not just identity theft, from a broad range of attacks, including online accounts to everything stored in devices. They also stand out since they provide parents with 24/7 response to cyber threats from US-based professionals and risk management coverage for cyber events, loss of funds, and ID theft.
Gen Z's growing role in the insurance industry
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It’s clear that Gen Z significantly influences the insurance industry and will continue to shape how insurers interact with their customers. The diversity within this generation brings unique needs that must be catered to if insurers are going to take advantage of the opportunities they can provide. Technology has dramatically advanced current insurers' capabilities and allowed them to offer more efficient solutions. With Gen Z at the forefront, examining how insurtech can be leveraged to better meet this ever-changing landscape's needs is crucial.
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