The financial industry has already started talking about Gen Alpha. But what is the meaning of Gen Alpha, and why should your insurance company already begin targeting them? Born between 2010 and 2024, Gen Alpha comprises those in the age range of early- or pre-teens. Shorter attention spans and high exposure to technology define how Gen Alpha experiences the world around them. Gen Alpha expect information to be served to them on their mobile phones. Yes, many of them already own one. Even those who use their parents’ devices are accustomed to quick and interactive information. Here’s a look at why insurers must buckle up to meet the unique needs of this emerging target group.
Traits that Give Meaning to Gen Alpha
A generation is typically defined by a significant event during their early years. Gen Alpha began when the first Apple iPad was launched in 2010, which is why they are also called the iPad generation. The single most important event after handheld technology became mainstream is the pandemic. Covid-19 re-instilled the realisation of the fragility of life among all generations. For Gen Alpha, this holds a greater meaning as they were still in the formative years, during which one’s mindset is shaped and life goals defined. Safeguarding the future with financial preparedness is a key lesson the pandemic taught the world.
Born to millennials and Gen Z parents, Gen Alpha learned about financial planning early. Around 93% of parents believe that financial institutions must educate younger ones about managing their finances. Financial literacy is increasingly becoming a life skill that parents want for their children. From the traditional 3-jars approach to leveraging mobile apps, money management is encouraged from the time kids begin receiving pocket money. Many Gen Alpha kids have bank accounts and debit cards that are designed specifically for minors. They are even taking up after-school jobs and receiving allowances for chores. Laying strong financial habits is a key upbringing agenda among parents of this generation.
Reaching the Uber Digital Cohort
Did you know that the iPad generation might never step into a physical branch of a financial institution? That is how deeply digitisation will drive the future of financial management.
Digital Delivery for the Digital Natives
Gen Alpha is the latest generation of digital natives. They consider their phones an extension of themselves. They do everything, including socialising, studying, exploring the world, and managing their money, through mobile phones. Insurance companies in India must ensure that their solutions are accessible via smartphones.
A mobile-first approach requires you to build a future-proof, seamless, and easy-to-navigate digital platform. Effectively leveraging advanced technologies, such as machine learning and predictive analytics, has become a necessity. The key is to innovate with a vision for the future. Insurance companies in India must identify and implement techniques to engage millennials, Gen Z and Gen Alpha in ways that resonate with each unique age range. Fostering deep connections is critical for building loyalty and lasting relationships. It is equally important to bust common myths around insurance and financial planning.
Fluid Products for Unprecedented Times
This generation is aware of the importance of financial preparedness. A majority of Gen Alpha kids have first-hand experience of hardships caused by unforeseen events. The insurance industry needs unique products that help them feel secure even during unprecedented times or events that are not yet perceived as possible. To cater to Gen Alpha customers in the future, your insurance brand will need flexible products that evolve with their needs and the changing world around them. They may prefer dynamic cost models and agile insurance solutions. With access to choice across digital platforms, affordability and uniqueness of the insurance products will become critical decision-making factors.
InsurTech solutions can empower insurance companies in India to introduce innovative and flexible products that help different generations secure their future.
Go Social on Digital Channels
While Gen Z spends about 1 to 3 hours per day on social media, Gen Alpha is poised to double this. Undeniably, their source of education, entertainment, and ways to engage with brands will be primarily digital. These include influencers, online education networks, and gaming apps. Gamified apps could be a way of reaching out to this generation and imparting financial education. Companies like Netflix, Disney, and The New York Times seem to have cracked this.
Cross-Industry Collaboration
Insurance companies in India can reach wider audiences with InsurTech solutions that help integrate insurance with products being purchased, such as car insurance with car purchases or iPhone insurance with an iPhone purchase. While piggybacking services in one way, another technique is to reach their inboxes with what interests the audience. Strategic collaborations with gaming giants and educators can help insurance companies introduce Gen Alpha to the concept and importance of different types of insurance products. This can get your brand noticed and help you position yourself as a future-ready insurance company in India.
Newer Money Formats
Reaching Gen Alpha at the touchpoints where they spend most of their time is paramount. Cathy Hackl, CEO of Spatial Dynamics, highlights that Gen Alpha is learning about money from games. And their first exposure to earning is in some form of digital coins, often cryptocurrencies. Alternate money is embedded into their lives from an early stage. Access to money and shopping is just a click away. Notably, a part of this generation's population is yet to be born. The access to money and tools to manage it are going to get easier with technological advances. InsurTech solutions designed to accommodate digital money can make your insurance brand stand out as a visionary in the evolving financial landscape.
Customer Centrism is the Mantra
Leveraging digital routes to give a voice to this generation flips insurance targeting. The days of designing an insurance product and marketing it to the audience are about to end. Targeting Gen Alpha primarily means co-creating with them. Digital natives are more comfortable in sharing personal information to get personalised services, provided their privacy is protected. Given their exposure, presence, and comfort with the digital realm, fostering a space where they express their needs can be a game-changer for insurance companies in India. This also paves the way for data-driven digital-only underwriting. Insurance companies in India must adapt to the dynamics of real-time analytics to offer hyper-personalised services with InsurTech solutions.
Gen Z is already abandoning brands that make them wait for a response to their queries. Gen Alpha will have even less patience. They live in the era of “right now or never”. Self-service and AI-powered customer assistance are crucial to avoid losing customers.
Empower the Tech-Savvy Generation
As Gen Alpha reaches adulthood in 2029, the collective economic footprint is projected to reach $5.46 trillion. This is also the largest generation by population. This highlights the potential market size and increased breadth of services required to serve them. The mental and emotional well-being of Gen Z, the predecessors of the iPad generation, is linked to their financial well-being. The trend is set to proliferate as Gen Alpha enters the job market. With preventive healthcare becoming increasingly popular, insurance is a key aspect in helping them prepare for emergencies.
Tips to Strike a Chord with Gen Alpha
With 51% of Gen Alpha discovering brands via YouTube, a great digital strategy is key to penetrating the emerging cohort.
Offer insurance products on a seamless digital platform.
Leverage short, engaging, and interactive video content to educate the audience.
Connect beyond business with community meetups and green drives.
Focus on family-friendly, safe, and long-term solutions.
Gamify education, financial planning, and the need for insurance.
Customise every interaction and touchpoint.
Employ emerging technologies, such as augmented reality.
Over 50% of Gen Alpha streams a video every day. Being the most connected generation, Gen Alpha can quickly become advocates for the brand. InsurTech solutions providers enable insurance companies in India to empower the target audience with digital and personalised solutions. They can be the bridge that connects insurers directly with customers to understand their needs. With expertise in driving engagement and sales, InsurTech solutions help digitise the entire customer journey. Streamlined processes and seamless navigation help insurance companies offer desirable customer experiences. Unified data accumulation and operations offer insurers a competitive edge for creating audience-ready, future-proof and agile products. Tapping into the potential of Gen Alpha starts with penetrating the digital world with InsurTech solutions.
Bibliography
https://www.atpe.org/Special-Pages/ATPE-News/ATPE-News-Summer-2024/Generation-Alpha (last accessed on Aug 20, 2024)
https://fortune.com/2024/05/03/gen-alpha-5-5-trillion-spending-power-economy-gaming-by-2029/ (last accessed on Aug 20, 2024)
https://www.investopedia.com/fa-one-thing-generation-alpha-success-8605716 (last accessed on Aug 20, 2024)
https://cyprus-mail.com/2024/08/13/redefining-financial-literacy-how-gen-z-and-gen-alpha-are-shaping-the-future/ (last accessed on Aug 20, 2024)
https://pro.morningconsult.com/analysis/gen-alpha-media-social-trends-2024 (last accessed on Aug 20, 2024)
https://youappi.com/mobile-marketing-strategies-for-gen-z-and-gen-alpha/ (last accessed on Aug 20, 2024)
https://www.brokertechventures.com/post/how-gen-z-and-gen-alpha-will-reshape-the-insurance-industry (last accessed on Aug 20, 2024)
https://www.investopedia.com/generation-alpha-definition-8606114 (last accessed on Aug 20, 2024)
