How insurers can communicate better with Gen Z

A new wave of customers is making its way to the Insurance sector — Gen Z.  This generation has proven to be vastly different consumers than their predecessors: they’re extremely careful with their spending habits, propelled by the recession and rising inflation, and live with a digital-first approach thanks to growing up with smart devices.

In tandem, half of insurance customers think the purchase process is outdated, preferring to buy it online but find this difficult to do. This is a big issue for Gen Z and sends a clear message to the Insurance industry that they must undergo internal shifts to cater to this new set of customers.

As such, there’s currently a disconnect between customer expectations and what the sector can offer them. Insurance is known as an industry that used to operate on sending payment checks through the mail and in-person interactions — an antiquated brick-and-mortar approach. Today, it’s important to blend the old with the new and diversify communication and customer experience channels for Gen Z so their Insurance journey is just as advanced as everything else in their life.

Thankfully, this young generation isn’t averse to acquiring insurance. Instead, Gen Z represents a new opportunity for the sector to improve its sales with a new focus. While the number of policyholders decreases for Gen X and Millennials, Gen Z’s steadily increases year over year.

Let’s go over why personalizing communication, building trust, and offering 24/7 support will be crucial for the industry to attract Gen Z consumers.

Personalization is the name of the game

Digital transformation has changed the value of data — today, it’s a company’s biggest asset. And if businesses want to make data work for them, they must use it wisely and responsibly. One of the best uses of data has been personalization, which condenses information from past interactions to offer customers more tailored services. This applies to every industry, including Insurance.

In a recent poll, 36% of Gen Z respondents said they were willing to share personal information to receive targeted ads, compared to 12% of Baby Boomers. So, what does this mean for insurers?

To start, bulk emails and text messages won’t do the trick with the younger generation. Their digital-first approach and willingness to share personal data means they expect companies to use their preferences when communicating. 

For example, if an auto insurance customer adds another driver to the policy, you could identify them as a candidate for multiple car insurance discounts as this might be the next step with multiple drivers in a single household. Likewise, if someone is delinquent on a monthly payment, you can send SMS communications that offer automatic payment or annual billing details.

Make yourself available 24/7

While insurers might believe Gen Z isn’t comfortable with in-person interactions, the reality is they are evenly split between a digital and face-to-face approach. This means that, even though you can still rely on traditional communication methods, they also expect you to communicate with them through digital channels.

For example, post-purchase, Gen Z appreciates your availability through text, phone, or a mobile app, even after hours. This is when automation becomes an insurance company’s best friend and sets your business apart from competitors. If customers want to communicate with you 24/7 via digital channels, automating conversations is the way to go. CRM platforms and messaging services now offer automation for your company to set up FAQs and SMS or in-app chatbots that allow customers to make appointments or ask questions about their policies at any time.

If you already use a messaging platform, inquire about its automation options or reach out to one that does — in 2024, customers expect these around-the-clock services from businesses.

Gain trust with communication transparency

A big factor in communicating with Gen Z is keeping transparency top of mind. This is the value they look for the most, whether that be related to premium prices or internal policies. As a result, insurers must communicate details like their compliance with federal laws to protect their information and anti-spam practices.

When vetting messaging services, insurance companies should work with providers that comply with laws like the Telephone Consumer Protection Act (TCPA) and the TRACED Act in the US, or GDPR in Europe — and stay updated whenever these policies change. Providers must give consumers the option to opt in or out of messaging channels like email, phone, or SMS and honor these demands.

While these practices seem small and merely procedural, they make a world of a difference for Gen Z, who prefer to do business with companies that respect their privacy and allow them to set communication boundaries.

Gen Z might seem like a tough nut to crack. However, they’ve proven to value flexible communication options — yet they’ll equally pick up the phone to call you if need be. It’s this generation that is leading companies to undergo a much-needed digital transformation that will benefit all generations of customers.