Topics In Demand
Notification
New

No notification found.

Incipient Insurance: Attitudinal Variations amongst Gen Z in India
Incipient Insurance: Attitudinal Variations amongst Gen Z in India

April 25, 2023

280

0

There is no getting around the fact that India, despite being one of the world’s leading economies has an abysmally low level of penetration when it comes to Insurance.

As a new cohort makes its way to working age and begins to confront the many dilemmas of adulthood, Insurance seems to have taken center stage. A looming pandemic, coupled with the younger generation being witness to the ill effects of rapid urbanization and sedentary lifestyles has highlighted the importance of insurance to India’s Gen Z population.

Tiered Expectations

Urban India hosts about 30% of the Indian population, with the remaining 70% being distributed amongst Tier 2/Tier 3 cities and rural areas. In the absence of definitive data regarding Gen Z’s outlook towards Insurance, we shall rely on the prevailing attitudes demonstrated by millennials (who are astoundingly close to Gen Z when it comes to outlook and behavior).

An online study conducted by Policybazaar revealed that respondents from Tier 2 and Tier 3 cities were far more likely to renew their health and term insurance when compared to their Tier 1 counterparts (89% versus 77%). 

A large part of this could be attributed to Tier 2/Tier 3 cities being more grounded in familial values, and higher incidences of diseased folk not having access to advanced medical care in times of distress. Furthermore, Tier 2/Tier 3 cities are less likely to feature more avenues of distractions thereby inculcating a more conservative attitude amongst the younger folks in these places, particularly Gen Z. 

This attitude has a direct bearing on the kind of services that Gen Z customers from smaller towns expect. Since they are not as informed, they tend to seek more information and niche insurance plans that are uniquely suited to their needs. Agents who can empathize with them are also a welcome addition to it. 

As for Tier 1 residents, those who come from relatively affluent backgrounds are less likely to worry about insurance as they have a solid safety net to fall back on. Consequently, expectations have less to do with the variety and depth of insurance plans, and more to do with slick, delightful user interfaces that are on par with the other consumer-facing apps that they are used to.

Several respondents, across both Tier 1 and Tier 2/Tier 3 cities who were hospitalized experienced the distress of not having a proper insurance plan (or a plan with limited coverage) and were jolted into seeking a comprehensive insurance plan. The collective sentiment is that health coverage ought to hover anywhere between ₹15 - ₹20 Lakhs to ensure that medical expenses do not end up denting one’s savings.

Despite the ongoing economic slump, Gen Z has woken up to the perils of putting the horse before the cart and is more likely to prioritize their health over almost everything else. The insurance market could very well experience a period where demand is relatively inelastic as Insurance becomes a non-negotiable for many young Indians.

InsurTech firms and a redefined Insurance distribution playbook only mean that the age-old model of deployed agents and brokers is going to be upended. Gen Z, being a digitally savvy and precocious lot is more likely to undertake extensive research and seek out honest advisors before purchasing an insurance product.

Insurance, Disrupted

Technology has finally caught up to the insurance industry and is working its way toward disrupting it at a record pace. Improved connectivity and radically improved customer service in adjacent industries have raised the bar for satisfying Gen Z. This is the primary factor that is driving the expectations and attitudes of Gen Z when it comes to Insurance.

 


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


Mantra Labs is a global experience engineering & consulting firm that builds intelligence-driven solutions and delivers digital-first customer experiences for global enterprises. With its 275+ skilled and passionate technologists, the company specializes in providing end-to-end solutions for its clients across eight key industries. Mantra solves the most pressing front & back- office challenges faced by BFSI, Healthcare and Consumer Internet enterprises. Having worked with some of the World’s leading Insurers like SBI General Insurance, Care Health Insurance, Pramerica, Aditya Birla Health and AIA Hong Kong along with unicorn consumer startups like Ola, Myntra, Yulu, BlueStone and Quikr - Mantra Labs has been deeply involved in developing AI-powered technology solutions for business-specific problems. The company also has strategic technology partnerships with MongoDB, IBM Watson, Microsoft Azure and Nvidia.

© Copyright nasscom. All Rights Reserved.