The digital shift in life insurance: Engaging Gen Z and millennials

During the next five years, the life insurance industry will experience dramatic changes.

It’s becoming harder and harder for life insurers to convince young, healthy and in-debt consumers to pay premiums today for uncertain benefits a long way into the future. All the while, life insurers are beginning to pay out claims for their aging customer base, and what might feel like a trickle today will become a deluge in just a few years’ time as boomers continue aging.

It’s past time for marketing leaders to start taking advantage of all the ways technology can help educate, attract and onboard a new breed of customer. It’s no secret that the millennial generation has changed the game in virtually every industry, and now is the last window for life insurers to act before risking their very survival.

A rocky road ahead

It’s hard to sell life insurance policies to young adults. This has always been a reality for life insurers. But consider the confluence of factors impacting young people and their financial picture today.

• Millennials and Gen Z consumers are in debt. Mortgage rates and home prices are currently at a generational peak, and student loan debts have come due.
• Millennials are concerned about saving enough for retirement (CNBC).
• Gen Zers are much more interested in novel financial services, like digital-only banks and cryptocurrency investments, than they are in tools like life insurance (TD Bank).

Not only does life insurance feel like an irrelevant financial tool for young consumers, but it also lacks the perceived immediate return on investment many young consumers need right now to make a dent in their debt payments or support their lifestyle choices.

Adding to the problem is the life insurance industry’s reliance on individual, human agents to educate prospective buyers on the benefits of life insurance products during a one-on-one, time-intensive sales process. Insurers have been slow to adapt to new efficiency-improving tools — like advanced data analytics, artificial intelligence and machine learning — missing out on major industry trends and opportunities in the process.

The role of digital in the life insurance purchase

Even though Gen Z will remain a small proportion of all life insurance policies written well into the future, this particular generation of young people does place some significant value on life insurance and represents a valuable growth target for life insurers. The trouble for those less technically enabled insurers is that Gen Z research and buying behavior differs significantly from their elders.

In fact, 96% of Gen Z and 95% of millennial adults turn to the internet to research life insurance options. While smaller percentages expect to use the internet to purchase policies (17% and 24%, respectively) it’s clear that digital channels play a significant role in the marketing and sales process for in-market buyers.

To capitalize on this change in behavior, life insurance companies must stop thinking of their websites as brochures and consider the various roles their website plays in the purchase and engagement journey for their customers and prospects.

Why? Younger consumers are highly critical of the digital experiences they have with companies. Many studies show that more than 80% of website users say they would abandon a website entirely if it had a bad user experience on a mobile device, and research from Google has found that a 0.1 second improvement in the loading speed of retail mobile websites increased conversions by 8.4% and order value by 9.2%.

If younger consumers can’t find what they’re looking for, and fast, there’s very little chance for you to win them back a second time.

Reimagining digital strategies for life insurers

The path forward requires a comprehensive reevaluation of how life insurance companies engage with prospective customers online. Before investing in a full digital redesign or re-platform, life insurers can consider several kinds of assessments:

• Website and mobile design assessment: Reviewing the design and usability of your current digital tools can reveal where those experiences create friction points for customers and how even small changes can result in major gains.
• Analytics assessment: Consider an end-to-end review of your current website analytics and look for behavior patterns among your target customer segments. If advanced conversion tracking hasn’t been configured for your site, you may consider a tracking strategy optimization before diving too deeply.
• Digital platform assessment: The digital experience and marketing technology platforms that served your business and agents well in the past may not be what will help you grow and thrive in the future. A variety of no-code and marketing-friendly tools allow life insurers to create massive efficiencies and help them do more with less.

Beyond the assessment, life insurers looking for faster ROI from their digital investments can consider the following strategies:

• Optimize for mobile: Given that a significant portion of Gen Z and millennials will likely access your digital platforms via mobile devices, ensuring a seamless, fast, user-friendly mobile experience is paramount.
• Personalize the customer journey: Leverage data analytics to offer personalized recommendations and services, catering to the individual needs and preferences of younger consumers. Use tools like a CRM to collect data on website visitors and dynamically change website content when the visit the next time, or enable your marketing organization to further tailor marketing communications based on browsing data.
• Incorporate interactive tools: Tools such as premium calculators, autonomous chatbots, and virtual advisors can demystify the process of purchasing life insurance, making it more accessible and engaging. Generative AI can be trained on the precise needs of your policyholders to offer highly personalized education that takes into account many financial scenarios.
• Focus on educational content: With high research activity among younger demographics, providing informative, easy-to-understand content can position your company as a trusted advisor in their decision-making process.

How Wipfli can help

Wipfli understands the role digital technology can play in the growth and sustainability of your organization, and we’re ready to help guide you to a new digital-first approach to the next generation of consumers.

Contact us today and learn about how we can give you the guidance you need to navigate this shift and provide robust, engaging and user-centric solutions to your audience.