Insights into Generation Z: What insurers should know

Most of Gen Z wants independence and flexibility in their work. Claims can offer this.

Gen Z employees have grown up with technology in their hands and aren’t afraid to take advantage of all it has to offer. (Illustration: Hylton Warburton)

Right when you think you’ve figured out what you need to know when working with millennials, another generation enters the workforce. Generation Z (Gen Z), which includes those born between 1995 and 2015, accounts for 25% of the entire U.S. population. Combined with millennials, they represent almost 50% of the U.S. population.

Like millennials, Gen Z presents both challenges and opportunities for claims managers. If understood and leveraged, they have the potential to become some of the most productive claims professionals the industry has ever seen. Gen Z has grown up with technology in their hands and they aren’t afraid to take advantage of all it has to offer. They’re independent and quick learners. They can multitask in ways that most of us could only dream of on a good day. However, some unique characteristics of Gen Z are radically different and not to be ignored. Let’s take a look at some of these as well as their implications for claims.

Most independent, most stressed

Gen Z may be considered the most independent, and perhaps the most self-reliant of all. Most of Gen Z has a higher level of digital literacy when it comes to leveraging technology and apps to get things done. If they need answers to questions, they just “Google it.” In many ways, this is perfect for claims reps who work in the field. They’re self-starters and they’re used to learning new things on their own. But, there’s also a potential downside that cannot be ignored.

Of all generations in the workforce, Gen Z has the worst mental health according to research by the American Psychological Association. Gun violence, political issues that affect their future, work, health concerns, finances and rising suicide rates were reported as the top stressors and often lead to depression. In another study conducted by Cigna, Gen Z scored the highest for loneliness. Although there are differing opinions about the effect of social media on this, those who spend more time face-to-face with others reported being less lonely.

This creates an interesting dilemma for managing Gen Z. Cigna’s research also found that those who were employed were less lonely than others. Creating opportunities for face-to-face interactions and opportunities to form meaningful relationships may play a more important role than initially thought when considering remote work structures.

Although some companies have made great strides in leveraging technologies to foster teamwork and collaboration, it will be even more important with Gen Z working as field adjusters. Claims managers who make this a priority will find it easier to attract and retain Gen Z. They can promote the use of collaboration technology in their recruiting messages and they can increase retention by leveraging innovative ways to engage their employees who work in the field.

Tech-savvy but not necessarily workplace ready

Surrounded by technology since birth, Gen Zers are truly digital natives. They don’t know what it means to live in the world without the internet, social media or a mobile device. According to a study by ZeroCater, 98% of Gen Z have a mobile device, and 50% spend at least 10 hours per day online. But that doesn’t mean they know how to use the software and technologies used to handle claims.

Finding the latest emojis and apps first may gain respect among their peers, but will it help settle claims faster/? Gen Z is going to need guidance and training to be digitally literate and professional in the workplace. And they are going to need to learn that the corporate world isn’t necessarily as advanced as Gen Z may think. Not everything is going to be online, available and accessible, and their peers may not be as tech-savvy as they are.

Helping them understand and really value the different skills and capabilities of more experienced workers early in their careers will go a long way in preventing workplace conflict. Finding ways for more experienced professionals to learn new ways to use technology could potentially increase their productivity. Some companies have had success with reverse mentoring programs to leverage each generations’ skills and capabilities. The companies that have had the most success are those that have integrated diversity and inclusion into their values.

Hyper-connected with an 8-second attention span

With the shortest attention span of all generations, managing Gen Z can be challenging, particularly when you are trying to teach them about insurance, what’s covered and what’s not. Most of Gen Z are used to learning everything they want to by watching YouTube or whatever else they can find on the internet. They prefer just-in-time learning in bite-sized segments.

Traditional claims training programs that span days or weeks may not be effective, especially if Gen Z’s are paying more attention to their phones than the person conducting the training. Instead, consider a wider range of shorter training modules that are available and accessible online in a video format, preferably YouTube. Not only will this benefit Gen Z, but it may also help to reduce the overall costs associated with in-person or classroom training.

Diverse in more ways than one

The trend toward a more diverse America has been long in the making. Gen Z is the most racially and ethnically diverse generation yet. And, if these trends continue, this might be the last generation in the U.S. with a Caucasian majority.

Gen Z is also more accepting of others’ diversity, including their sexual orientation. Two-thirds of Gen Z identify themselves as exclusively heterosexual, whereas for millennials it’s 71%, Gen X 85% and baby boomers 88%.

Although the insurance industry has made great strides in diversity, many departments, including claims, have yet to fully accept and embrace diversity and inclusion in the workplace. Too often, unconscious biases get in the way when working with others who are different. These biases can affect attitudes as well as management decisions including who gets hired and who gets promoted.

While overcoming biases takes time, there are steps that claims managers can take. Making diversity and inclusion initiatives a priority is a start. Enforcing a zero-tolerance policy towards discrimination in the workplace also helps.  Perhaps, most important is ensuring that claims leaders are setting the tone and are aware of their own biases that unconsciously get in the way.

Fiscally frugal and salary does matter

Money is one of the greatest stressors for Gen Z. They’ve seen their parents’ net worth fall from the recession and they’ve seen their older friends take on massive amounts of debt from student loans and credit cards. Gen Z does not want to make the same mistakes.

According to research by Rave Reviews, job preparation is the main reason to go to college and 88% of the first graduating class of Gen Z chose their major with jobs in mind. Increasingly, more Gen Zers are considering forgoing a traditional college education to go work for a company that provides college-like training or educational reimbursement. And at the same time, when looking for employment, Gen Zers have high expectations for pay and promotions.

The insurance industry is arguably one of the least understood among students getting ready to graduate. When they think of insurance, they often think of insurance agents and fail to look beyond their own preconceived notions about the possibilities. Careers in insurance, specifically claims, have the potential to align extremely well with the needs and interests of Gen Z. Most of Gen Z wants independence and flexibility in their work. Claims can offer this.

Gen Zers like to multitask and often find themselves bored with routine, repetitive tasks.  Claims can offer variety due to the unique nature of every single claim. There are always going to be jobs in claims due to the nature of insurance and the fact that it is a highly regulated, relatively stable industry. Gen Z should find this, along with a competitive salary, highly attractive.

As much as salary matters, however, Gen Z has high expectations of their managers. They want to feel accepted and connected as part of a team. They want to work hard to prove themselves and have opportunities for advancement.

Opportunity for claims

Claims managers have a unique opportunity to differentiate themselves with Gen Z if they embrace their differences and take the time to understand their issues and concerns.  Recruiting Gen Z will require different approaches as most Gen Zers aren’t really thinking about insurance companies when they are looking for jobs. Claims may need to rethink their recruiting processes and how they communicate what they have to offer. They may need to consider nontraditional recruiting methods earlier in their process, especially when aligned with Gen Z’s concerns over debt and their needs for independence and interconnectedness.

Perhaps even more importantly, claims managers may find that they need to rethink their approaches to development and retention. In today’s world of intensified competition and continuous change, traditional approaches may no longer work. Finding innovative ways to accelerate learning and collaboration in the digital era isn’t just necessary for attracting and retaining Gen Z. It’s necessary to ensure organizations will have people with the right skills, mindsets and capabilities to do their jobs.

Since claims is one of the few functions in the insurance industry that deals directly with customers on a daily basis, there are more opportunities to gain insight into the ever-changing expectations of consumers. By being proactive and thinking about what it’s going to take to attract and retain Gen Z, claims can play an important role in preparing the rest of the organization for the future.

Cathy Ellwood (Cathy.Ellwood@EllwoodEnterprises.com) is the president and CEO of Ellwood Enterprises L.L.C., a strategic leadership development consulting organization that focuses on the needs of the insurance industry.

To learn more about claims-related topics like this, join us at the America’s Claims Executive Leadership Forum & Expo in New Orleans, April 20-22, 2020.

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