There is no question that digitisation is becoming a necessity for the health and protection insurance markets, however it is clear younger generations are becoming the most influential population in driving forward technology change.
Those known as Generation Z, aged from 12 to 27, are seen as digital natives, but the Health & Protection insurance technology roundtable in association with Comarch heard it is more than their use of technology which is influencing developments.
Young adults also have very defined views about themselves and particularly their health which in general terms sets them apart from many older generations.
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As Dr Macarena Staudenmaier, head of clinical product and operations at Simplyhealth explained, this area is where the two subjects of health and a digital first approach meet most intensely.
“We’ve recently started the digital journey for our employee assistance programme (EAP) and the initial data shows 80% of people who contact the EAP through the digital journey are under 25,” she said.
“And they’ve said they wouldn’t have contacted the EAP if we didn’t have a digital way of contacting them.
“They wouldn’t have just rung up and said they want to speak to someone, they would much rather do it over WhatsApp, text or the digital interface.”
It is a telling statistic which also provides an insight into the issues being faced by young people today.
Generation Z is typically defined as those aged 12 to 27, so while some are already well on the way in their careers, around half may not have even left formal education yet.
All this means they have lived through some highly turbulent times during their formative years.
As Dr Staudenmaier continued: “Generation Z is the first one which has been told they might never get economic stability – ‘It doesn’t matter if you work really hard because you might never be able to afford a house’.
“That translates into attitudes, particularly around insurance where they don’t know if they want to pay for something they might not be able to afford in the future; they want something to help them now.
“This is what we’re seeing in terms of on demand self-pay services, they need direct access to what they’re trying to get in the moment rather than speculating about the future.”
Proactive not reactive
The panel agreed that mental health and overall wellbeing is a vital part of this population, with them being more aware of the importance of mental health than any generations to come before.
To their credit in this regard, it was also acknowledged that young people are more open about their mental health and being proactive to look after themselves, rather than reactive after issues have worsened.
On that point, Unum head of proposition development Saumya Barber noted that around one in 10 of the group risk insurer’s users were Generation Z and they often use services out of hours.
“They’re going in and looking at content, they’re looking at self-management – it’s a different style,” she said.
“It isn’t them saying ‘I’d like to go see someone who’s going to fix me’. They’re proactively engaging in it.”
And this, Barber continued, is a key insight into the collective mindset for many younger adults.
“We know this generation is choosing happiness and health over money; they’ll move jobs for benefits and to be in a good culture with good people,” she added.
“All of those things are playing through, and so how we package and communicate benefits to the workplace and to end users are critical to all of that.
“They’re also much more conscious of the world around them from a sustainability perspective, and that’s really worth bearing in mind.
“They want to be more conscious and access services which they know are going to be better for them and better for the planet.”
Bupa head of customer transformation Emma Robertson added that the unique position of this population with so many not yet being adults was also presenting other difficulties in resources.
“It’s important to remember half of this generation we’re talking about are currently being supported by their parents or their guardians,” she said.
“As insurers we need to provide those parents that support, but we’re finding for access to these mental health services we’ve just got bottlenecks.
“There’s so many people trying to access child psychologists or similar professionals in that field we just can’t get them access quick enough.
“So we need to switch our thinking. Can we get access to other types of services or clinicians faster and quicker and that are more effective?”
Changing life stages
This brought the conversation more widely to how young people’s typical life stages are likely to be rather different from those of older generations.
And as a result their interaction with financial services and the health and protection insurance sectors in particular could be very different.
The panel acknowledged that traditional life events are moving out in age so that the traditional triggers such as buying a house or having a family are happening when people are much older.
So it was agreed the market needs to completely reassess how it is triggering interactions to those customers and understand what they are leaning on throughout their lives.
Aviva head of individual protection propositions Victoria Francis noted it was a “tricky” situation.
“They’re not thinking about a 25-year term, they’re not thinking about death at that point in time,” she said.
“Instead they’re thinking about having something they can use now. They’re asking: ‘How is it tangible for me at this moment in time?’
“That’s where a lot of the health and wellbeing services that we’ve talked about come into play, and we should also not be leading with life insurance, we need to be pushing the likes of income protection more.
“And obviously the route to market and the way we do that probably needs to change,” she added.
Part of decision-making process
Scottish Widows head of protection change Paul Jenkin agreed and noted the insurer was talking about the challenges of Gen Z and how it can adapt to address them, but he added there could also be benefits.
“There’s huge opportunities to a generation that’s more willing to be open, which is a problem in protection as people don’t disclose information,” he said.
“It’s a generation that’s willing to appreciate innovation, think iteratively rather than going for that one perfect solution that fits.
“So there’s lots of opportunities in there as well if we can engage with them.”
And Jenkin highlighted a key element for the whole industry to address of not having people from that cohort in their decision-making teams.
“How do we avoid that?” he continued.
“There’s clearly an intergenerational play here so how do we avoid that being as a parent to child, because you’d naturally associate their problems with us as a parent-child relationship rather than a peer-to-peer one.”
One approach to that problem discussed by the panel was taking a longer view and building a protection habit early, creating interest and understanding, while the purchase of a product may be several years away.
However, it was acknowledged that finding those engagement points and subjects was very difficult.
Another suggestion raised by Jenkin was creating a rider or add-on product to parental policies for children which could then convert into an adult policy at an appropriate time, but he feared this could end-up suffering from the parent-child relationship.
“Should we be thinking more about how we target them directly?” he asked.
“We need to drive true engagement and true ongoing relationships, rather than a transactional engagement point for us to stick it in a filing cabinet and hope you never have to claim on it.
“And if we don’t think differently and end-up taking that approach with Generation Z, then we’re going down a bad path.”
Advisers need to connect
An intergenerational gap was also highlighted within the advice community as the panel noted industry data which suggested there were comparatively very few representatives from younger age groups in the intermediary population.
This further added to concerns that advisers may also not be able to relate to or connect with younger people.
“You’ve got an entire industry where their mum or dad is going to be trying to sell them their insurance product and that is not going to go down well,” said Vitality journey director Andrew Foley.
“They’re going to be entirely digital and they will not follow a traditional path. So particularly in the protection space where advice is traditionally the route into that market, it’s a massive challenge.”
Some of this challenge arises from the main communication methods that appear to be prevalent in younger generations.
Failing to recognise and address this could put the sector outside the conversation.
As Comarch insurance – business development manager Bradley Jones highlighted, while telephone calls are rarely answered by younger generations, even email is now becoming rarely used.
Instead he pointed to social media platforms as being the go-to choices for information and suggested the industry needed to target these more successfully.
“I’d love to really analyse all those multiple touchpoints for users because TikTok and Instagram are used more as a search engine than Google now,” he said.
“Using my niece and her friends as a sounding board I asked if they needed financial advice, where would they go?
“The answer was TikTok. So the first place I’d go is TikTok to find out advice on protection and health.”
Digital first, not digital only
Overarching all this discussion is a vital trait which Dave Winter, head of innovation at Benenden Health identified as crucial for supporting and delivering services to Generation Z.
“There’s a strong point also running outside this conversation,” he said.
“There’s a real thrust for immediacy in this generation; an expectation of immediacy. And a lot of methodologies and techniques have been products that have been developed for that generation.
“It’s about them wanting access now and being quite happy to use digital channels. In fact, they prefer that, but they want it now, and there’s a different expectation than traditional processes and products.”
However, there was a suggestion that, as with most people, guidance from those with experience may be welcomed by Generation Z around important decision-making situations.
“We did some research on this subject earlier this year,” said Aviva’s Francis.
“It did show that while young adults are happy to shop around and do their research, they do want someone to be able to talk to about it.
“Whether that be parents or a financial adviser, not necessarily to go through the buying stage, but to answer questions.
“So while I do agree they are digital first, I don’t think it’s fully digital; they want some form of reassurance because it is a complex process.”
Download the full roundtable supplement for the discussion by following this link.