How to Customize Insurance for Gen Z

Nearly 40% of Gen Z does not have homeowners’ or renters’ insurance, highlighting the need for solutions tailored to this group. 

Concentrated woman carrying stack of cardboard boxes for relocation

The onset of the pandemic brought in a new era for homeownership, with a noticeable surge in Generation Z buyers – i.e., those born between 1997 and 2012. Studies show that the homeownership rate among 25-year-olds today surpasses that of their parents, as 30% owned homes in 2022, compared with the 27% homeownership rate among Generation X individuals when they were the same age. 

As Gen Z continues to seek homeownership opportunities, the focus on property/casualty insurance becomes increasingly crucial to ensure comprehensive protection for their valuable assets and safeguard against potential risks and unforeseen events. Nearly 40% of Gen Z does not have homeowners’ or renters’ insurance, highlighting the need for innovative and custom solutions tailored to this group. Given the surge in Gen Z homeownership, it is important to understand the profound impact of Gen Z's digital-first approach, preference for personalization, sustainability focus, demand for transparency and emphasis on value and education throughout the insurance industry.

Gen Z's Influence on Insurance Offerings

It’s no secret that technology is part of everything the Gen Z demographic does. Their preference for fast and seamless online experiences influences the insurance landscape, prompting insurers to invest in digital platforms for policy management, claims processing and customer support. While more than seven out of 10 Gen Z consumers expect companies to deliver personalized interactions, the demand for personalized services drives insurers to use data analytics to tailor insurance solutions to individual preferences and risks.

In addition, Gen Z’s focus on environmentally friendly solutions has prompted insurers to introduce sustainable products, such as discounts for eco-friendly homes and vehicles. Their lifestyle preferences are driving demand for non-traditional and cost-effective insurance options such as on-demand or usage-based coverage for specific events or periods. This cost-conscious nature is pushing insurers to focus on transparent communication about policy terms, benefits and competitive pricing.

See also: Strategic Guide to Unlocking 'Gen Zalpha'

The Case for Customization and Transparency in Insurance Solutions

Recognizing the importance of customization in insurance solutions is paramount, especially when catering to the diverse preferences and lifestyles of Gen Z homeowners. Customization ensures effective coverage for emerging risks linked to gig economy work, digital assets or eco-friendly living. It enables more accurate risk assessment and pricing, ensuring policyholders are neither underinsured nor over-insured. Additionally, given Gen Z's technological savviness, insurers have an opportunity to innovate and integrate advanced technologies like AI, IoT and blockchain into their offerings. This generation is more likely to embrace and benefit from digital insurance platforms and tools, providing a promising avenue for the industry to continue evolving and innovating in the insurtech space.

The Gen Z homebuying boom underscores the need for adaptable insurance products. Gen Z's different risk factors, such as environmental concerns or work-from-home implications, emphasize the need for customization. Tech-oriented solutions like smart home discounts or coverage for high-tech appliances resonate with this connected generation. Customized policies can adapt to evolving home ownership dynamics, offering coverage for home offices or green home improvements. Transparency, a value held high by Gen Z, is also enhanced through customization. It provides a clearer understanding of what is covered and what isn't, leading to better-informed decisions. 

Insurers carrying out transparent practices in policy details, pricing and claims processes cultivate robust, trusting relationships. Beyond building trust, transparency is instrumental in enhancing customer engagement and reducing confusion about policy terms and claims processes. Transparency paves the way for a smoother customer journey, fewer disputes and improved customer service experiences. The straightforwardness it brings to customer support boosts the overall experience and effectiveness of the service provided. A transparent relationship encourages honest and constructive feedback, which is invaluable for continuous improvement.

Challenges and Considerations for Tailoring Solutions for Gen Z

As Gen Z homeowners weigh insurance options, it is important to be aware of the challenges and considerations insurers are facing when tailoring solutions to this group. Three significant impacts and challenges arise with Gen Z policyholders: 

  • Technological Expectations: Gen Z has high expectations for technology integration in all aspects of their lives. Insurance companies must offer advanced digital interfaces, mobile apps and AI-driven services. Keeping up with these technological demands can be challenging and resource-intensive.
  • Data Privacy Concerns: With the use of big data and analytics to customize insurance solutions, there's an increased focus on data privacy and security. Gen Z is particularly conscious about how their personal data is used and protected.
  • Educational Gap: Despite being highly informed, Gen Z can misunderstand insurance products and their benefits. Insurers need to invest in educational and engagement strategies to bridge this gap.

​​​​​​​See also: Rethinking Insurance With a Gen Z/Millennial Mindset

Moreover, carriers should be cognizant of changing risk profiles, shifts in marketing and communication preferences, the need for product flexibility and scale, economic factors and the importance of building long-term relationships. 

To stay agile in a rapidly changing landscape, insurers should leverage advancements like data analytics and AI to gain insights into Gen Z's preferences and behaviors, aiding in the development of customized insurance solutions. Modernizing IT infrastructure is crucial to providing digital-first services that align with Gen Z's tech-savvy expectations. Moreover, fostering a culture of innovation is critical for staying ahead of the curve. Creating innovation labs, collaborating with technology startups and engaging with Gen Z through surveys and social media to guide product and service development are all beneficial when developing solutions. Strategic partnerships with insurtech companies can help fill gaps and drive success in transparency and digital initiatives.

Insurtech solutions can significantly enhance an insurance provider’s capabilities, providing seamless digital platforms that integrate into an insurer’s current offerings and cater to Gen Z policyholders. For the claims process, in particular, advanced insurtech solutions are designed to promote transparency for both insurance professionals and consumers, addressing the educational gap and improving comprehension from the initiation of a claim to its resolution. Features like real-time updates and expectation management can keep policyholders well-informed and in control throughout every stage of the claims process. Insurtech platforms also place a high priority on data security, incorporating robust security protocols to safeguard personally identifiable information. Moreover, insurtech solutions cater to policyholders' preferences through various support channels, including phone, email and live chat.

The Gen Z homebuying boom necessitates a paradigm shift in insurance solutions, with customization emerging as a key driver for success. Insurers must adapt, innovate and prioritize transparency to meet the diverse needs and preferences of this influential demographic. This strategic approach aligns with Gen Z’s expectations for individualized services while providing a competitive edge over traditional one-size-fits-all offerings, opening up the potential for increased market penetration. As the industry evolves to cater to the evolving demands of Gen Z, those embracing these changes stand poised for sustained relevance and success in the dynamic insurance landscape

Troy Stewart

Profile picture for user TroyStewart

Troy Stewart

Troy Stewart is president and chief operating officer at Brush Claims.

Stewart started at Brush Claims 12 years ago as a field adjuster, then shifted into a quality assurance review position, where he rose to the ranks of vice president of daily claims. Appointed as COO, president and partner in 2018, Stewart was essential in the development of Brush Claims’ software suite Hubvia. He also played a large role in the evolution of the HyDAP claims handling program, which boasts a 68-hour cycle time.

In 2021, Stewart participated on behalf of Brush Claims in cohort seven of the prestigious Lloyd’s Lab by Lloyd’s of London.



Read More