30 Jan 2018

Insurers: Are You Ready for Gen Z?

By: John Baker

Insurers: Are You Ready for Gen Z?

Have you been thinking much about Gen Z? You should be. Gen Z refers to people born between 1996 and 2010. The youngest are eight years old, getting ready to enter middle school. The oldest are 20, about to graduate from college. And while millennials are still the most powerful generation around, that's going to change before you know it. Gen Z is just getting started.

In fact, they've already overtaken millennials in numbers. Last year, the youngest demographic attained the mantle of largest generation. Many of Gen Z are still too young to work, of course, but even those who haven't hit the double digits hold significant buying power: teens and children spend $44 billion a year.

So buckle up. It's high time to get ready for Gen Z.

What are they like?

Gen Z are shaped by three historical events: 9/11, the Great Recession, and the rise of the smartphone. Each of these forces exerts significant influence on the shaping of a generation.

For starters, note that the people of Gen Z don't remember the prosperity and stability of the nineties. They were no older than five when the Twin Towers fell. They were all of twelve years old at the Great Recession. The anxiety of terror, war, and financial insecurity are part of the landscape for them.

Take a moment to compare them to those born between the 1920s and 1940s. "The parallels with the Silent Generation are obvious,” said generational researcher Neil Howe. “There has been a recession, jobs are hard to get, you can’t take risks.” Like their great-grandparents, Gen Z see themselves as “responsible, determined and motivated to succeed.”

For the differences between these groups, look to the smartphone.

Within the last four decades, digital technology has transformed almost every aspect of our society. And Gen Z doesn't remember a world without it. There's no pre-Internet world for this generation: they're the first true digital natives. A few results follow.

Finance and insurance industry takeaways

Perhaps surprisingly, Gen Z are less cost-conscious than one might expect. "Sixty-seven percent of millennials surveyed said that they would go to the website to get a coupon, whereas only 46 [percent] of Gen Z polled said they would do the same," reported Huff Post.

Also, unlike millennials, Gen Z value products over experiences. This is generally good news for F&I, because it means they're less averse to spending—if they feel it's worth it.

That's an important “if,” however, and it comes with a few caveats. With a background of political and economic instability, Gen Z are DIYers. They don't have faith in conventional solutions, and they plan to pursue alternatives. As a result, you can expect them to take an active role in product research and purchase, shop for better options from third-party disrupters, and demand transparency.

Really, though, all this boils down to one question. Can you help Gen Z hack their lives? If the answer is yes, you're onto a major market opportunity. Need inspiration? Take a look at these financial brands that are winning with younger users.

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