Why insurance marketing needs to focus on Gen Z — and what it takes to capture their attention
August 7, 2023
Time has been catching up with younger consumers. The oldest members of the millennial cohort are turning 42 (!) this year, while senior Gen Zers are turning 26.
The cultural/experience gap between the two groups can be surprisingly wide, despite the tendency of older folks — and the media — to lump them together. For instance, many of the oldest millennials have a couple decades of familiarity with insurance products as consumers, while senior Gen Zers typically have only been thinking about policies and premiums for a handful of years — if they’ve been thinking about them at all.
Which means insurance marketers looking to cultivate their next-gen customers need to truly understand Gen Zers as more than just “younger consumers.” They have to study their circumstances and psychographics to tailor the right messaging across the right channels.
Toward that end, we’ve put together this list of seven key considerations for insurance marketers looking to engage Gen Z.
1. Understanding Gen Z’s perceptions of insurance
They grow up so quickly. “In 2023,” Insider Intelligence’s Christina Obolenskaya reports, “there will be more adult Gen Zers than adolescents for the first time — about half the size of the millennial population.” And two years from now — by 2025 — “almost two-fifths (37.1%) of Gen Z will own life insurance, exceeding growth rates of preceding age cohorts.”
To put that in terms of the total number of new prospects, “The share of Gen Z adults with life insurance will grow by 3.5% from 2022 to 2025, representing more than 6 million new customers,” Obolenskaya explains.
That adoption rate doesn’t necessarily come from a confident or well-informed stance, though. “Despite the fact that Gen Z is one of the most debt-averse generations yet,” Mark C. Perna notes in Forbes, “they also scored the lowest in a recent financial literacy study by the TIAA Institute and the Global Financial Literacy Excellence Center at the George Washington University School of Business.” For instance, Gen Zers on average were able to answer just 29% of insurance-related questions correctly (vs. 38% for millennials).
“The current research suggests that Gen Z consumers, while open to buying insurance, are uncertain about the various product offerings and their respective value,” says Erin Slater, Head of Strategy, Financial Services at Quad. “And young-adult Gen Zers are also a moving target when it comes to their insurance needs as they start families, invest in starter homes and build careers. To capture the attention of these consumers, insurance marketers have to position themselves as trusted sources of clear, straightforward answers about their offerings.”
2. Price really matters to Gen Z
Gen Z is price-conscious — for very good reasons. According to Deloitte’s 2023 Gen Z and Millennial Survey, just over half (52%) of Gen Zers say they are “living paycheck to paycheck.” That’s up from 46% in the 2022 survey.
And 35% of Gen Zers cited the “high cost of living” as their top societal concern (above other options including unemployment and climate change). That’s up from 29% in the 2022 survey.
“Given what we know about the financial restraints of a lot of Gen Z consumers,” says Slater, “insurance marketers have to focus their messaging on outlining the real value of their offerings — and explaining why investing in insurance is a necessity when it comes to building financial security.”
3. Social media as a key channel
Millennials and older generations witnessed the transformation of our culture through the adoption of social media. Gen Z, in contrast, was born into a world already fully transformed. “For Gen Z, technology is practically second-nature, while millennials had to adapt to the ever-expanding social media and online communication advancements,” as USA Today’s Olivia Munson puts it.
The degree to which Gen Z is immersed in social media is striking. As Morning Consult’s Ellyn Briggs reports, “More than half of Gen Zers spend four or more hours on social media every single day”—a key finding of a survey the polling firm released in December 2022. That’s almost double the average time spent on social media by U.S. adults across all generations. The same Morning Consult poll almost found that 88% of Gen Zers interact with their peers through social media.
“Insurance marketers have to be part of the social conversation,” says Bobbie McCain, Director of Site Content & Social Media at Quad. “Insurtech brands such as Kin Insurance and Ethos Life get on Gen Z’s radar by being present in their feeds. But challenger brands and legacy brands alike need to have a comprehensive social strategy to reach this audience.”
4. Harnessing the power of influencers
A few months before Morning Consult released its survey results, The New York Times published a story headlined “For Gen Z, TikTok Is the New Search Engine.” In the piece, Times technology reporter Kalley Huang noted that “TikTok’s rise as a discovery tool is part of a broader transformation in digital search” wherein “people are turning to Amazon to search for products, Instagram to stay updated on trends and Snapchat’s Snap Maps to find local businesses.”
The common thread among this “new search” trend: The information being surfaced is often delivered by influencers. Amazon has its Amazon Influencer Program, while Snapchat and TikTok have “stars” with millions of followers. The most obvious realms of influence are centered around fashion, beauty and household items — videos with the #tiktokmademebuyit hashtag have racked up more than 8 billion views as of this writing — but so-called finfluencers have also become a force to be reckoned with. (See, for instance, “TheStreet’s 2023 Finfluencers to Watch,” released in April.)
5. Deploying visual content for maximum marketing impact
Another common thread in the “new search” trend: Visuals beats text. In May 2022, Reuters’ Chris Taylor wryly described the emerging phenomenon of “staid financial companies … learning a new language from scratch: speaking in bite-sized clips with a high-quality visual style to share lessons in a lively and engaging way.”
Given that “Gen Z cut their teeth on social media and viral videos,” as the Content Marketing Institute’s Jodi Harris writes, they’re visual content consumers by default who are “more likely to view their news than read it. Those visual preferences also apply to their product research and brand engagement activities. For example, a 2020 study found 70% of Gen Z say product videos and photos are particularly helpful when making purchasing decisions.”
“Taking a visually-driven approach when marketing to Gen Z isn’t about dumbing things down,” says Erik Basil Spooner, Creator Director, Marketing, at Quad. “It’s about meeting them where they are in terms of how they consume information, and it’s also about setting an accessible tone. For instance, when you look at the visual identity systems of challenger brands in the insurance space such as Lemonade, they tend to be spare and even playful, not dense and textual.”
6. Taking a mobile-first approach
As YPulse noted in a 2022 report, “The iPhone was first released in 2007 when the oldest members of Gen Z were just six. The majority of them don’t remember a pre-smartphone world, and they’ve also had them in-hand from incredibly young ages” — with Gen Zers on average “getting their first smartphone at age 12 (around 7th grade) compared to millennials’ average of 17-years-old (around 12th grade).”
Per a 2022 Kantar survey, “Gen Z respondents reported spending an average of 6.37 hours on their smartphones” — more than millennials (5.57 hours), Gen X (4.4 hours) and boomers (3.38 hours).
“An imperative strategy for insurance marketers targeting the Gen Z demographic is the development of a ‘mobile-first’ approach that transcends mere mobile-friendliness,” says Garon Benner, Director, Owned Platforms and Technology at Quad. “We need a paradigm shift toward immediate engagement and effective communication within the constraints of a smartphone display. The true litmus test for any crafted message lies in its capacity to capture attention swiftly and deliver the requisite information with minimal UX friction.”
7. Personalized marketing matters to Gen Z
If there’s a through-line to all the points above, it’s that Gen Z consumers want messaging that speaks to them — across their preferred platforms (mobile, social), in formats that engage them (particularly visually), and that recognizes their unique circumstances (particularly their budget constraints).
“Not that long ago, insurance was always personal. Insurance reps were welcomed into people’s homes, and the relationships and the trust they built spanned decades,” says Devon Craig, Head of Product Marketing at Quad. “To reach Gen Z, today’s insurance marketers have to find new ways to cultivate a sense of connection and relevance — so the process of buying insurance transcends the transactional and comes to represent the transformational: thosemost important and meaningful life moments when young adults need support, and a sense of financial security, the most.”
The bottom line
It’s time for insurance marketers to target Gen Zers with tailored marketing that speaks to their unique circumstances. And given the size of the cohort — Gen Zers make up one-fifth of the total U.S. population — connecting with these next-gen customers represents a massive (and urgent) opportunity.
“Marketing to Gen Z at scale in a way that feels personalized and authentic may sound paradoxical,” says Slater, “but with the right combination of strategies and martech — and the right partner — it’s entirely possible.”
Want to learn more — and continue the conversation? Reach out to Erin Slater, Head of Strategy, Financial Services, at email@example.com.