Bridging the Gap: How Insurance Can Adapt to Gen Z Needs

Uzone.id – The importance of insurance must be accompanied by developments in increasingly rapidly changing times, which are currently dominated by Generation Z, aka Gen Z, who are digital natives.

Since childhood, the generation born in 1997-2012 has been exposed to digital technology, the internet, and smartphone devices which influence the way they make decisions.

Gen Z tends to be selective in making decisions, including when buying goods or using services, such as insurance. With increasingly open information, they can easily compare products, services, prices, and consumer reviews before deciding to buy a product or service.

“Having insurance can indirectly teach Gen Z how to manage their finances wisely, especially in allocating their income according to its benefits. Periodically they have to set aside money for policy premiums, which helps them learn how to allocate their income more wisely. This way, they are better prepared for any potential risks,” said Dian Dian Budiman, Chief Operations & Health Officer Prudential Life Assurance.

Therefore, Gen Z tends to be a rational buyer, not impulsive. Most Gen Z will decide to buy a product if they feel they need it. Likewise in choosing insurance. 

Gen Z tends to select brands and services based on the ease of submitting and claiming via digital channels. They also like a more personal approach to communication with insurance agents, so they can find out which insurance products are suitable and suit their needs. 

Relying on a digital approach with a human touch

The insurance industry is now starting to adopt a “Digital at heart with human touch” approach. This step is carried out by utilizing digital technology that has a human touch to provide an easy and comfortable experience for customers in accessing insurance products and services. 

Quoting FWD Insurance, which presents an application and chatbot so that prospective customers can get insurance product information, and policy information, and submit claims, including getting various promos and rewards. 

Chatbots play a role in making communication more personal. The technology applied still relies as much as possible on human touch so it doesn’t feel stiff.

Care about mental health

Mental health is one of the concerns of Gen Z. Based on a survey conducted by the FWD Group and published on the official FWD Group website, as many as 65 percent of people in Asia believe that mental health will be one of the important things in the coming year.

This is not without reason. Several stressors, such as family responsibilities, work, rising inflation, and post-pandemic adjustments, can affect mental health. 

If not managed, this can hurt daily activities. Therefore, FWD Insurance created the Mind Strength program in digital format.

This program can be freely accessed by the general public, so it is not only for customers and is free of charge. Specifically for customers, other added value is also provided, such as physical and mental recovery services, namely the FWD Care Recovery Plan. 

With the increasing number of Gen Z who on average are at a productive age, where they are capable and have an income, the question arises, does Generation Z need to have insurance? And what insurance is suitable for them?

A strong and healthy physical condition does not guarantee long-term health. There are several strong reasons why you need to have insurance as early as possible, namely:

1. Premium costs are not expensive

The sooner the better, perhaps there is some truth in determining when to have insurance. The principle “let’s go later, the question now is still wanting to have fun first” is not in line with insurance which has a higher premium value with age. 

Health conditions continue to change, making the risk of disease higher, plus medical costs will also continue to increase over time.

2. A secured future

Often young people can afford to buy modern coffee and watch concerts every month but don’t have any protection for themselves. 

It’s a good idea to divert a little money from spending money on something more useful, such as insurance, which can guarantee a calm and comfortable future if financial risks occur.

3. Learn to manage finances

Buying insurance means having to pay the premium every month. Without realizing it, this makes you learn to manage your finances well.

Starting from being responsible for paying premiums that require you to arrange cash flow every month. 

Having a guarantee of protection will help you secure your financial condition if there are obstacles to financial income.

4. Greater opportunities for submission

Age determines how easy it is for the insurance company to approve your application. So, if register when you are young, then the chances of being approved or accepted are greater. 

Young people are considered to still be in good health without long-term disease. 

It’s different if you just apply for insurance in the age range of 40 years and over, the company will carry out a more stringent selection of medical checks.

After knowing the importance of insurance for Gen Z, all that remains is to find out and choose what insurance they need. At least, these four insurances can be recommended:

1. Health insurance

Health insurance is insurance that covers medical costs, such as costs for hospital care, surgery, and medicines. 

If you already have health insurance from the office, there’s no harm in buying other health insurance independently. 

The problem is, when you stop working or retire, health insurance from the office will be stopped and the cost of applying for insurance in old age will become more expensive. 

2. Personal accident insurance

Gen Z is a productive age group who has an active lifestyle and nature carries out daily routines. So the risk of a disaster or accident occurring is something that cannot be predicted. 

As a precaution, you can rely on personal accident insurance to protect against financial losses when an unwanted incident occurs.

This insurance provides coverage for an accident that causes temporary or permanent disability, requires care and treatment, and even death. 

3. Life insurance

Apart from accident insurance, life insurance is also important for Gen Z, as insurance that will provide full coverage for cases of death, total permanent disability, or unproductive conditions that cause the insured to lose their source of income. 

Several types of life insurance are generally available, including Term Life Insurance (Term Life Insurance), Whole Life Insurance (Whole Life Insurance), Endowment Life Insurance (Endowment Insurance), and Unit Link Insurance. 

4. Vehicle insurance

Gen Z’s productive age usually already has financial capabilities, one of which is to buy a vehicle.

So, vehicle insurance is something that can be considered for those of you who have private vehicles such as cars or motorbikes.

This insurance product has two types of insurance. The first is all risk, where the company will cover car repair costs from minor things (scratches and dents) to major damage such as collisions and car theft.

Then the second is TLO or total loss only, where the insurance company will only cover repair costs if the risk occurs and there is a loss whose value is below 75 percent.