Gen Z - the generation of the future

It is the generation whose name is mentioned when it comes to topics such as affinity with technology, social commitment or individual fulfilment. They move effortlessly in the digital space and are currently still in the phase of life between adolescence, education and career entry. We are talking about Generation Z. They present insurers with new challenges with their expectations, postulates ERGO CDO Mark Klein: "In order to meet the demands of this generation, insurance companies must utilise the entire range of digital options available to them. This makes Gen Z a driver of digital transformation."

Gen Z has grown up in an era of digital change. For teenagers and young adults born between 1995 and 2010, social media and new technologies are a natural part of life. Whether YouTube, Instagram or TikTok - the digital space serves these digital natives in a variety of ways. This is where they express themselves personally and network. It is the place where political engagement takes place, information is sought and passionate discussions are held. What begins digitally is often continued in analogue form, as Gen Z moves effortlessly between the virtual and real worlds.

If you look at the life and career paths of Gen Z, they are diverse and dynamic. The group is looking for a modern and flexible working environment that suits their individual needs, values and ambitions. In addition to flexibility in terms of working hours and location, employment for Gen Z must not only be a means of earning a living, but above all must also fulfil their ideals. This makes them open to diverse career paths and professional experiences.

In addition, Gen Z shows a high willingness to participate in political and social discussions worldwide. The group is sensitive to diversity and very committed to socio-political issues. From climate change and gender equality to healthcare policy - the range of issues that concern this generation is extensive. 

What expectations does Gen Z have of companies?

The points that characterise the identity of Gen Z therefore range from social media to social impact. The reality of their lives differs significantly from that of baby boomers or millennials. This is also reflected in the expectations that Gen Z has of companies. For insurers, this means that they are confronted with a completely new understanding of financial security, provision and risk management. It is no longer just about traditional coverage concepts or classic asset accumulation. What is needed are innovative approaches that reflect the individual needs and lifestyles of Gen Z.

And not to forget: Even though this generation already has round-the-clock access to information, this does not mean that they are already fully informed. Quite the opposite: when it comes to insurance and finance, there are some massive gaps in knowledge. Gen Z is aware of the importance and necessity of insurance. However, there is little interest in this topic: insurance is perceived as complicated and costly.

What is needed is not more information, but needs-based content and guidance. Gen Z has grown up in times of crisis and is surrounded by impulses that need to be processed everywhere. In this flood of information, they are looking for security and trust. In other words, the core elements that insurers offer. But how do we reach this target group in order to fulfil our mission? How do we ensure that young customers are adequately insured, especially with regard to future risks? The answer: through the consistent digitalisation of services, processes and products. And by engaging with their world.

Customer experience, flexibility, transparency, simplicity

Gen Z expects a frictionless digital experience from insurance companies first. The industry needs to implement innovative technologies, including user-friendly apps, online services and digital communication channels. The applications must not only be intuitive to use and visually appealing. It is also expected to be able to switch seamlessly between different channels and finalise products with just a few clicks. A confident digital presence is a must in order to reach Gen Z.

Flexibility is also required. Due to the diverse and dynamic lifestyles of Gen Z, insurers must offer flexible policies that can be adapted to the individual needs and life situations of the insured. And they need to do so easily, at any time and anywhere in the world. "Static" policies are unattractive to Gen Z. For them, it's no longer about thinking in terms of decades, but years at most. This must also be reflected in the products. This calls for new digital business models that meet Gen Z where they are in life. 

Based on their experiences in the digital age, Gen Z also attaches great importance to transparency. Insurance companies must provide clear and easy-to-understand information in order to gain the trust of this generation. Non-transparent insurance policies or complicated contract terms are a deterrent. Modern, authentic and appealing content is needed here - communicated at eye level and in line with the new forms of interaction. Social media platforms demand completely different content in a much shorter time than was the case with traditional advertising. At ERGO, for example, we work with influencers on TikTok. Their reach not only helps us to reach younger target groups. They also create entertaining formats for our products that are well received by the community. In other words, from the target group for the target group.

And: as Gen Z is used to receiving quick results and answers, insurance companies must not only be able to respond immediately to enquiries, whether by direct message, telephone or in person. In addition to highly efficient customer service, they also need to be able to settle claims quickly. Here, too, the use of new technologies such as artificial intelligence or robotics can provide significant support, as "Generation Now" has no sympathy for long processing times. 

Communication on all channels

The expectations that Gen Z has of insurers therefore range from customised policies to a comprehensive omni-channel strategy. Insurance companies need to utilise the full range of digital possibilities in order to understand and reach this generation. This also includes, for example, innovative technologies such as augmented or virtual reality for a modern customer approach.

Successfully positioning yourself digitally as an insurer for Gen Z is a challenging task. It requires both resilience and constant adaptation to changing trends and expectations. Because we are never finished with digitalisation. But insurers who manage it can score twice over: Firstly, by not only winning over new customers. But also, ideally, by positioning themselves as an attractive employer. Because we know that: Gen Z will be the next to enter the labour market. 

Please note: This article was first published by Versicherungsmonitor.

Text: Mark Klein, CDO ERGO Group AG