A topic too often flying under the radar in the insurance space is the importance of appealing to younger generations. Millennials have already entered the industry, and now it is time for Gen Z to become employees.
According to research from Aon Programs, Gen Z makes up 20% of the US population, while millennials account for 50%. It is becoming increasingly apparent that the industry needs to revamp business models and shift attention towards understanding the employment behaviour of younger generations.
“This is the first time where we have five generations of people working within the industry,” Bill Pieroni (pictured above), CEO at ACORD, explained to Insurance Business. “We have silent, boomer, Gen X, millennial, post-millennial (Gen Z).”
In 10 years, Gen Z will be 20-30% of the workforce. If the insurance industry hopes to appeal to a younger crowd, digitization and transparent communication will be essential.
ACORD looked at 30 years of employment data from carriers, reinsurers and brokers and found that, surprisingly, all generations care about the same values in the industry. The difference is that younger generations are more open to voicing their opinion. They say when they want more or want something to change.
ACORD’s research also found that the insurance industry ranks below mining and manufacturing when it comes to attracting, developing, and retaining younger talent, even though insurance value systems align with millennials and Gen Z.
“It’s a very fulfilling industry and it’s a shame we don’t do a better job convincing people to join,” Pieroni added. “It’s about a company’s culture, process and perspective.”
“Gen Z is more comfortable in an online ecosystem than other generations, millennials included. Being digitally native is a unique characteristic of this group and something that is really going to mold the experiences companies will create for them,” Dave Zeornes, sales leader at Aon Programs told Insurance Business.
Gen Z values authenticity and sincerity from a marketing perspective. Zeornes noted that younger generations look at successful financial companies as trusted brands, which evidently shapes their employment patterns.
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“When we talk about authenticity in the insurance industry, for a long time it’s been based on referrals and knowledge of the risk management space, which works to a certain degree,” Zeornes mentioned. “The problem is Gen Z doesn’t necessarily see or hear that from existing industry professionals.”
“Our talent study highlights that the essence of strategic intent is resource allocation,” said Pieroni. If you have the strategies in place to attract young talent - such as marketing spending, providing access to mentorship programs and refining how to approach younger generations on an annual basis, you are more likely to be successful.
The industry could also make better use of social media platforms to promote authenticity. Knowing Gen Z does not go to Facebook for information, there are other platforms not being taken advantage of, such as TikTok or Instagram.
“Facebook may be more appealing for baby boomers and older millennials and TikTok gears more towards Gen Z. We haven’t figured out a good way to utilize TikTok in the insurance space but it’s a big opportunity,” said Zeornes.
Instagram is the in between of the social media marketplace. The platform is more developed commercially, but the insurance industry still lacks an overall social media presence.
“Over the next couple of years, it will be interesting to see how insurers take advantage of social media experiences,” said Zeornes.
“Baby boomers have been running insurance for 40 years. The fintech revolution 10 years ago changed the banking community and that’s what’s happening right now with insurance. It’s one of the most disreputable industries in our economy and a lot of it is still run-on legacy systems.”
Pieroni noted the alignment digital maturity has with attracting new talent – something he described as a “profound correlation.” New graduates don’t want to work with obsolete technology or deal with paper anymore.
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“You have to have state of the market capabilities to attract talent whether you’re a carrier, broker or reinsurer,” said Pieroni.
“Gen Z is more open to change than any other generation,” Zeornes added. “They have the opportunity to build on what previous generations have done, revolutionize and change the world of insurance. It’s the responsibility of the current people in the industry to recruit new talent with fresh ideas - the future of insurance lies on the shoulders of Gen Z.”