One main reason that Gen Z consumers are hesitant about buying insurance products is a lack of personalization, says regional InsurTech, Igloo.
Traditional insurance policies often include broad coverage, which drives up costs. On top of that, many aspects of the policies might not apply to each consumer. Gen Z (born between 1996 and 2012) is incredibly price-sensitive. Combined with its openness to share personal data to enable personalization, this opens up a window of opportunity for insurers to deliver personalized products and experiences.
The insurance sector has already recognized this and there are some personalized products available. Going forward, personalized policies in the form of usage-based insurance will be essential to allure and keep Gen Z consumers. An example of this would be stackable microinsurance products that enable one to pick and choose their preferred coverage and create the ideal plan at their desired price point. The emergence of IoT, 5G, AI, and big data have all contributed to this.
Apart from personalization, the other top ways Gen Z shape insurance are:
Speed and Convenience
In an age of digitization, everything is available at the click of a button. This phenomenon has given rise to the demand for both speed and convenience.
The emergence of InsurTech has helped the sector keep up with this. Embedded insurance has given rise to new channels of distribution by seamlessly integrating insurance products into the buying process. Trends such as accelerated underwriting and digital assistants also improve the customer experience.
Igloo does this through strategic partnerships with major players such as e-commerce giants Lazada and Shopee, leading payment platforms DANA in Indonesia, GCash in the Philippines, and convenience store chain Circle K in Vietnam.
Every day presents new threats, from digital security breaches to novel health concerns. As a result, Gen Z is turning to microinsurance to safeguard against these emerging risks. Thus, insurance products tailored for modern lifestyles, addressing concerns traditional insurers don’t typically cover like online shopping fraud, data breaches, and even device protection are gaining traction.
The still-developing economies and rising middle class in the Asia Pacific create an uptake in demand for cheaper, more affordable insurance plans.
The emerging risks that insurers are beginning to address aren't limited to those faced by humans. With over 70% of Indonesians, Vietnamese, and Filipinos owning pets, health insurance for pets has become lucrative for insurance companies. On its part, Igloo recently partnered with GCash and Malayan Insurance in the Philippines to offer Pet Insure, which provides reimbursement, pet owner’s liability, and 24/7 pet owner’s personal accident cover.
Gen Z looks for credible brands to buy from. These include brands that are aligned with Gen Z’s strong personal values and beliefs. Aspects like sustainability, diversity and inclusion are key to this segment, with 58% of Southeast Asian Gen Zs seeing brands as an extension of themselves.
Education and Awareness
Gen Z consumers have grown up in an age of near-perfect information. Extensive research and parallel browsing are common stages in the purchasing process, especially for complex products like insurance.
With comparison and evaluation of features like documentation and claims processes, pricing and premiums, and range of protection, insurers must create clear USPs and fight off competition.
Igloo is the first full-stack insurtech firm to emerge from Singapore. It has offices in Singapore, Indonesia, Thailand, the Philippines, Vietnam, and Malaysia, as well as tech centres located in India and China. With a mission of making insurance accessible for all, the firm leverages big data, real-time risk assessment, and end-to-end automated claims management to create B2B2C insurance solutions for platform companies and insurance companies.