"The key takeaway here is that insurers need to recognise the importance of a strong digital presence - enhancing online reputation is going to be key for life and health insurers and brokers looking to tap into a younger market."
- Gavin Maguire, Head of Life and Health in the UK & Ireland at SCOR
This year’s report interviewed 12,563 Gen Z (18-26 year olds) and Millennials (27-42 year olds) across twenty-two different markets, discussing financial education, wearable data, and mental health.
Of those surveyed, less than half (46%) of young people in the UK have a good understanding of life and health insurance products, while 11% admit to having ‘no knowledge’ about insurance. To learn more about insurance products, 53% of Gen Z looked online, either to digital courses (26%), videos (12%), forums ( 9%), or social media (6%). Only 13% turned to an insurance adviser.
Consequently, 35% of Gen Z and Millennials purchased policies based on ‘good online reviews’, ahead of price (31%), and an established brand name (12%). When purchasing protection, 29% searched for advice online beforehand and 24% decided to purchase their most recent life or health product after a personal recommendation.
In the UK, 72% of Gen Z and Millennials were prepared to share wearable data to get life or health insurance, 82% would share their previous claim history, and 71% would openly share their medical and mental health history. However, 75% said they would want a ‘discount on their premium’ if they had to share personal data, while 67% would expect to receive retail discounts. When discussing stress, 55% of Gen Z and Millennials often or always feel stressed compared to 47% worldwide. Financial pressure was the most common reason for stress (29%) amongst Gen Z and Millennials, followed by an uncertain future (21%).
Insurers have said their experience with young people mirror these findings with Debbie Kennedy, CEO at LifeSearch, highlighting that “When engaging with protection insurance, Gen Z particularly (as well as Millennials) are significantly under-represented, compared to older consumers.”
However, when younger consumers are engaged, LifeSearch found that they were more likely to take out protection. “What is clear is that many are true digital natives – they naturally start and prefer to stick with a purely digital experience,” she explained. Kennedy felt that this starts from “being exposed to and learning more about, to comparing and buying cover […] And the channels and platforms they use are evolving too with Gen Z increasingly using search functions on social media over Google when they want to find out more.”
“At LifeSearch, we recognise that to reach these consumers and to protect more UK families properly, we need to turn up where they are and tune in to their wavelength… and not rely on more traditional routes of distribution, or jumping straight into ‘buy mode’.”
Gavin Maguire, Head of Life and Health in the UK & Ireland at SCOR, agreed the data shows that “online access to insurance products is hugely important to young people, in terms of education and advice, and purchase, with social media playing an increasingly important role – 10% saying it was social media that triggered their most recent life or health insurance purchase.”
In light of this report, Protection Reporter spoke to Elizabeth Train-Brown (23 years old), Prugna Kerai (21 years old), and Victoria Elen Drave Leung (20 years old) to find out what they thought of Life Insurance and Critical Illness (CI).
Prugna thought Life Insurance offered “Some financial security for loved ones and family after the policyholder’s death but could also be used to pay off debts.” As such she felt that its importance depends on the individual; "if you’re financially comfortable then I don’t see a reason why you would need it for the purpose of survival […] However, if your financial state isn’t secure then perhaps you would need it more just in case something fatal were to happen to you.”
Victoria agreed that Life Insurance acts as “a repayment for their loss in a monetary way for their family or next of kin.” They thought “Especially in unexpected cases, I think Life Insurance serves its purpose in ensuring there’s some return when a loved one passes away.” But they don’t think Life Insurance is very attractive to young people because “we don’t want to think about dying and not many people rely on us financially unless we have dependants.”
Elizabeth thought Life Insurance was paid by your employer when the policyholder passed away. “I think it's kind of important for families and people with dependants but I wouldn't personally get it because no one financially relies on me,” she explained. Overall, she felt that Life Insurance is “definitely not an attractive proposition for young people – most of us are broke and don’t have families of our own to support.”
Meanwhile, Victoria thought that “apart from support with medical costs, Critical Illness probably covers things like necessary recovery support – such as paying for physiotherapy sessions, or at-home medical equipment like drip therapy for someone who has postural orthostatic tachycardia syndrome (PoTS).” Although they assumed it would cost extra for long-term or life support, Victoria still felt that CI was more important than Life Insurance as “we’re a lot more likely to get sick than die, and people may have multiple experiences with critical illness in their lifetime.”
Prugna disagreed, explaining that “either in death or in critical illness, there’s a chance financial insecurity can become a problem,” while Elizabeth argued that if the policy “paid some income for time off work and towards private medical costs” that makes it more attractive as she’d “be alive to enjoy it.”
