Manila, Philippines, 14 September 2023 - Igloo, a regional insurtech providing people-first and simple insurance solutions, is leveraging upcoming technologies like blockchain and AI to protect underserved segments across Southeast Asia against emerging risks and needs. As part of its mission to provide “Insurance for All,” Igloo unveils how Gen Z (which McKinsey defines as people born between 1996-2012) will shape insurance in the near future.
By 2025, McKinsey suggests that this segment will make up a quarter of APAC’s population, making them a big driver of the economy. In the Philippines in particular, around 40 million Filipinos are considered to be part of this segment.
Known for being true digital natives and digital savvy, this generation’s preference for speed and convenience, and different lifestyles open a new door filled with opportunities for the sector to tap into.
The insurance industry is changing rapidly with the arrival of Gen Z in the workforce. Speed and convenience are now crucial, and the industry must understand evolving consumer preferences to stay competitive.
Speed and Convenience
In an age of digitization, everything is available at the click of a button. This phenomenon has given rise to the demand for both speed and convenience.
The emergence of insurtech has helped the sector keep up with this. Embedded insurance has introduced innovative distribution channels by seamlessly integrating insurance products into the purchasing process. Additionally, trends like accelerated underwriting and digital assistants are enhancing the overall customer experience.
Igloo does this with a wide array of strategic partnerships with major players such as e-commerce giants Lazada and Shopee, leading payment platforms DANA in Indonesia, GCash in the Philippines, and Circle K in Vietnam. Igloo embeds its products in different distribution channels - with even Southeast Asia’s first insurance sold in convenience stores with Circle K.
The Age of Hyper-Personalization
One of the major reasons Gen Z consumers are hesitant about buying insurance products is the lack of personalization. Traditional insurance policies often include broad coverage, which drives up costs. On top of that, many aspects of the policies might not apply to each consumer. Gen Z is incredibly price-sensitive. Combined with its openness to share personal data to enable personalization, this opens up a window of opportunity for us to deliver personalized products and experiences.
The insurance sector has already recognized this and there are some personalized products available. Going forward, personalized policies in the form of usage-based insurance will be essential to allure and keep Gen Z consumers. An example of this would be stackable microinsurance products that enable one to pick and choose their preferred coverage and create the ideal plan at their desired price point. The emergence of IoT, 5G, AI, and big data have all contributed to this.
Every day presents new threats, from digital security breaches to novel health concerns. As a result, Gen Z is turning to microinsurance to safeguard against these emerging risks. Thus, insurance products tailored for modern lifestyles, addressing concerns traditional insurers don’t typically cover like online shopping fraud, data breaches, and even device protection are gaining traction.
APAC is one of the biggest markets for microinsurance. The still-developing economies and rising middle class create an uptake in demand for cheaper, more affordable insurance plans. Using new channels and cutting-edge technologies, Igloo has introduced innovative products such as the 360-Degree Phone Protection to protect smartphones from unexpected repair costs brought about by unwanted incidents and Travel Master with COVID-19 that protects travellers from mild travel inconveniences such as delayed flights to emergencies like accidents and medical incidents.
Interestingly, the emerging risks that insurers are beginning to address aren't limited to those faced by humans. With over 70% of Indonesians, Vietnamese, and Filipinos owning pets, health insurance for pets has become lucrative for insurance companies. Igloo recently partnered with GCash and Malayan Insurance in the Philippines to offer Pet Insure, which provides reimbursement, pet owner’s liability, and 24/7 pet owner’s personal accident cover.
Gen Z looks for credible brands to buy from. This includes not only brands that deliver impeccable performance but also align with their strong personal values and beliefs. Aspects like sustainability and diversity & inclusion are key to this segment, with 58% of Southeast Asian Gen Zs seeing brands as an extension of themselves.
According to a study published by Lloyd’s, the global underinsurance gap is US$162.5 billion, with emerging economies accounting for 96% of this gap, and Southeast Asian countries like Vietnam, Philippines, and Indonesia are among the least insured in the world.
Insurers now need to be more aware of the societal impact of their operations. Choosing responsible partners, increasing philanthropic expenditure, and ensuring DEI within the organization have become significant considerations.
Education and Awareness
Gen Z consumers have grown up in an age of near-perfect information. Extensive research and parallel browsing are common stages in the purchasing process, especially for complex products like insurance.
With comparison and evaluation of features like documentation and claims processes, pricing and premiums, and range of protection, it is imperative for insurers to create clear USPs and fight off competition.
Igloo wants to make insurance affordable and accessible for everyone. The insurtech identifies upcoming risks that consumers need protection against, and together with its strategic partners aims to solve them. Its technology enables it to do so in a way that delivers a seamless experience to customers. To increase insurance penetration, a deep understanding of cultural and behavioral shifts driven by changing lifestyles across the region is essential.