Generation Z and Insurance: How can you make investments more attractive?

Dec 19, 2018 | 2 months ago | Read Time: 4 minutes | By iKnowledge Team

Institutions seeking to communicate with the next generation will need to find them online. Creating effective online focused communication and platforms is the key to tapping in this generation.

Generation Z, or the generation built of people who were born after 2000, is going to be nothing like the market has ever seen before. According to a report by Pew Research, Generation Z or Gen Z as it is endearingly called, is going to occupy at least 40% of the workforce by 2020 – making it bigger than the preceding generations by a significant margin.

This generation is different from previous generations in a lot of ways, thanks to being exposed to bleeding edge technologies from a very early age, the effects of which we still haven’t completely figured out. They work in ways that older generations cannot grasp easily. They are uber-connected, spending at least 3 hours online every day. This generation also handles money very differently from previous generations, making it hard for investment and insurance companies to market to them. This is primarily because the problem statement that worked for baby boomers and to a large extent, millennials, is not working on Gen Z any more.

How are Gen Z difference when it comes to investments?

For members of the Gen Z sect, there is a mobile app for everything, including insurance. This is the generation which has grown up with smartphones and are perennially connected to the internet and its vast resources of data, effectively being able to take more informed decisions and do comparative analysis of the likes that were simply not possible before.

The emergence of Fintech or Finance Technology is targeted as kids as young as 8 to make them more conscious about the concept of money, savings and how investments impact life. This generation is far more likely to trust a computer algorithm when it comes to investment decisions than its predecessors, who were largely dependent on human advisors and agents.

In this context, companies like Aegon Life are leading the way forward. Eschewing a traditional agent led sales model, the company has instead focused heavily on making its online platform easy to use. This also allows for cost savings on commissions that would have been paid to intermediaries. The company is able to pass on these savings to customers in the form of more cost-effective plans. For instance, the iTerm Insurance Plan by Aegon Life begins for as low as Rs 388 a month. One of the plan variants offers coverage till a jaw-dropping age of 100 years. The plan also allows for upgrades depending on the life stage of the insured. If you get married or have kids, the plan also enables you to increase your cover in line with your family’s requirements.

Known for their frugality and coming of age during the Great Recession watching their parents get laid-off and struggle to find jobs, Gen Z is growing to be more cautious about money, conservative about spending and are already thinking about stretching every rupee earned to save for retirement.

Source: Logica

Gen Z is the best prepared for accepting digitization of money, cryptocurrencies like bitcoins, and the new emerging fintech services powered by robo-advisers, thanks to their ability to navigate new complex technologies. The entire idea of investment in the mind of Gen Z is to work smarter instead of harder, making more per rupee earned, and use all the technology available at their disposal to increase the return of investment from the money they put in. The Gen Z is specifically dependent on services like:

Gamified Investment Platforms – Gamification is playing a big role in engaging the new generation, being able to simulate real life trading experiences rather than a textbook manual on how investments work. This is helping them invest faster, and more smartly while being aware of the risks. There is also a competitive streak involved in gamification which encourages long term commitments. With many of these solutions available on cellphone, Gen Z can also be tweaking their investment portfolio real time on the move.

Online Forums and Discussion Boards – For investors who are just starting out or about to start, advice forms a large part of the decision-making process. And crowd sourced advice is always more credible than a single source presenting his or her opinion. This is where online forums and discussion boards come into the picture where people share their experiences, reveal common pitfalls and talk about what works and what doesn’t. This is something that the previous generations didn’t have the privilege to, because of technological limitations and the culture of trusting only people you know.

Here’s how you can make investment attractive to this new generation of upcoming investors

Make Your Service Smart, Intuitive & Super Easy to Use

Gen Z has grown up with a smartphone in one hand, and a tablet in another. They don’t know how to purchase something that is not available on their smartphone. Unlike previous generations, they are not familiar with brand loyalty, and the age of digitization has just made this easier. Thus, ease of use and diversity of channels through which you can access the data is now paramount.

Invest in Content, and Create Policies Contextually

The problem statements of previous generations are very different from the problem statements that Gen Z has. And with the problems, the solutions are bound to change too. Creating solutions that are tailor-made to the problems faced by Gen Z is imperative to acquiring and retaining them as customers. This includes adopting cryptocurrencies into the portfolio, investing in creating mobile apps, and creating a unified experience for the new age.

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