Why insurance keeps losing Gen Z

[SINGAPORE] Gen Z is quickly becoming the most powerful consumer segment—but insurance providers are being left behind. Despite growing up amid economic disruption and digital abundance, most Gen Z adults remain uninsured and uninterested. A 2024 NAIC study reveals that less than one-third hold basic coverage like travel or life insurance. The real issue isn’t apathy—it’s a deep mismatch between what Gen Z needs and what insurers offer. This isn’t just a marketing failure; it’s a business model breakdown. As other financial sectors modernize for mobile-first, trust-averse, and value-conscious users, insurance is still speaking a language this generation doesn’t recognize.

Context: A Generation Mistrusts and Ignores Insurance

The numbers are stark. Just 21% of Gen Z have renters' insurance. Only 5% hold contents insurance. And even travel insurance—a low-cost, high-visibility product—barely reaches 30% penetration. According to the National Association of Insurance Commissioners (2024), these aren’t edge cases—they’re industry averages.

But this isn’t just about affordability or lack of awareness. It’s about credibility. Gen Z came of age during the 2008 financial crisis, the COVID-19 pandemic, and the crypto bust. They've witnessed institutions—banks, governments, even schools—fail to deliver on their promises. Insurance, a notoriously complex and opaque product, looks less like a safety net and more like a trap.

As a result, insurance remains postponed until "real life" kicks in: a mortgage, a family, a health crisis. Until then, Gen Z consumers would rather risk going without than engage with something they neither understand nor trust.

Strategic Comparison: Fintech Won Gen Z—Insurtech Hasn’t

The contrast with digital banking and investing is instructive. Fintech startups like Chime, Robinhood, and Wise didn’t just digitize traditional services—they rethought them for a new user profile. Mobile-first interfaces, transparent pricing, human language, and creator-driven marketing turned financial chores into apps Gen Z uses daily.

Insurers, meanwhile, have largely confined “innovation” to digitizing paper processes or launching half-hearted mobile portals. The industry still depends on jargon-heavy policies, dense PDFs, and sales-driven agents. This makes even basic products—say, renters’ insurance—feel intimidating, manipulative, or unnecessary.

Where fintech leaned into simplification and trust-building, insurance clung to institutional logic. Gen Z doesn’t want more information—they want clarity. Not more features—usability. Not better ads—authenticity.

Insurtech challengers like Lemonade and Root made early attempts to disrupt the space, but they’ve struggled to scale trust and profitability at the same time. The issue is systemic, not cosmetic. Selling policies on Instagram won’t fix it unless the core product evolves too.

Implication: A Strategic Imperative to Redesign, Not Rebrand

The opportunity isn’t small. Gen Z will outspend Millennials by 2031, according to Bank of America, and they’re already influencing family decisions and shaping workplace benefits. Yet if insurers wait until this cohort starts buying homes or starting families, they’ll have lost the chance to build brand equity—and loyalty—from the start.

Redesigning for Gen Z doesn’t mean dumbing down. It means making insurance visible in daily life—whether that’s embedded in gig economy platforms, integrated into student services, or explained in 60-second reels by trusted creators. It means offering monthly pricing without punitive clauses. It means making claims feel as easy as refunds.

It also requires humanizing the value proposition. Gen Z isn't allergic to responsibility—they're allergic to bureaucracy. If insurers want to be relevant, they need to earn trust one user experience at a time.

As Jennifer Fitzgerald, co-founder of Policygenius, told, “Gen Z isn’t anti-insurance—they just want something that fits the way they live.” Right now, the gap between expectation and delivery is too wide to ignore.

Our Viewpoint

The insurance industry is not just losing Gen Z—it’s actively pushing them away. With outdated systems, convoluted products, and tone-deaf outreach, insurers are proving they don't understand the next generation of customers. But this isn’t inevitable. The strategic winners will be those who treat this as a design problem, not a demographic one. The moment demands more than rebranding—it calls for rethinking insurance as a utility built for digital natives. Gen Z doesn’t need to be convinced insurance matters. They need to be shown that insurers can be trusted to deliver when it does.