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Generational Preferences and the Insurance Industry’s Digital Disconnect


  • 90% of U.S. consumers want companies to interact with them through their preferred channels, with two-thirds of Gen Zers and Millennials favoring text communication.
  • Per McKinsey, nearly nine in ten American consumers of all ages use one or more digital payment methods.

The average age of a C-suite executive is 55, according to research from Korn Ferry1. The oldest members of Generation Z were born in 1997, making them 25 years old in 2023. That 30-year age gap can result in a major digital disconnect between companies and consumers. For insurers to appeal to younger customers, they need to understand how generational preferences impact digital expectations.

The Generational Divide

Older generations and younger generations have always had trouble relating to each other, but the rapid advancement of technology has widened the generational divide. Today’s younger generations have grown up with the internet, social media, and smart phones. Basically, they’ve grown up in an entirely different society than the one their parents and grandparents experienced.

Pew Research Center2 breaks down the generations as follows:

  • The Silent Generation – born between 1928 and 1945.
  • Baby Boomers – born between 1946 and 1964.
  • Generation X – born between 1965 and 1980.
  • Millennials – born between 1981 and 1996.
  • Generation Z – born between 1997 and 2012.

Many events and trends shaped these generations, from war to recessions. However, technological differences stand out as a huge dividing line. During the time that most Millennials were in school, technology helped shape their experiences and expectations – first it was the rise of personal computers, then the internet, and finally smart phones. And many Gen Zers have never known a world without these technologies.

What Do Different Generations Expect from Companies?

Don’t expect a member of Gen Z to pick up the phone and call for help. According to CommBank3, 49% of Gen Zers feel anxious about speaking on the phone.

How do Gen Zers like to communicate? Mostly by text. A 2022 survey from Mitto4 found some strong generational preferences for communication with companies, as well as preferences for payment options. Overall, 90% of respondents wanted companies to interact with them through their preferred channels. Among all respondents, 46% favored texting over email, especially for quick interactions or notifications, but more than two-thirds of Gen Zers and Millennials expressed a preference for text communication. SMS text was reported as the preferred channel for pay-by-link payments. This was largely because text is faster than email – speed was a priority for 27% of all respondents and close to 70% of Gen Zers and Millennials.

Apps are also very popular. Many modern consumers expect convenient, all-in-one tools with everything they need for self-service. In a 2022 survey by Chase5, 87% of respondents said they use their banking app at least once a month – a 2% year-over-year increase. And it’s not just younger generations who want this type of convenience. The survey revealed 93% of Millennials, 90% of Gen Xers, 89% of Gen Zers, and 84% of Boomers prefer to manage their banking in one place.

Consumer Satisfaction and Demand for Digital Payment Methods

J.D. Power6 says the P&C insurance sector’s digital transformation has “hit some speedbumps when it comes to customer satisfaction.” People are using digital channels to manage claims, but they’re not entirely happy with the results. Claims cycle times have become longer, leading to frustration. Even worse, some processes are redundant. For example, claimants might submit a photo using a mobile app and think they’re done, only to find out they still have to arrange for an in-person estimate.

According to data from Statista7, no generational cohort reports satisfaction with the digital offerings of their insurers. Less than 25% report that their auto or home insurer provides a good range of digital services, such as a variety of apps or digital claim status notifications. Even so, 32% of Millennials said they purchased car insurance online, underscoring their strong preference for digital options.

It’s no surprise that the pandemic caused a shift in the demand for digital interactions, including digital payments. PYMNTS.com reported that 57% of U.S. consumers surveyed stated that they choose companies based on digital payment options.8  And a 2022 consumer payments survey conducted by the Federal Reserve showed that the move toward online credit card payments that began in 2020 has not only persisted but increased. In fact, the results showed that credit cards were the most used payment method in 2022.9  Approximately 84% of U.S. adults had a credit card in 2021.10

Policyholder Expectations & Insurer Digital Disconnect

Consumer expectations are changing faster than insurance processes. This situation makes it difficult to meet the demands of younger generations, especially digital natives. The result is a disconnect between what insurers offer and what policyholders want.

However, there is a bright side. According to J.D. Power6, although only 41% of claimants use a website or app for the first notice of loss, overall satisfaction is higher among those who use these digital tools to file their claims.

The insurance industry’s digital transformation is ongoing. As insurers continue to progress, they need to check in with consumers of all ages to see what’s working. Younger employees should be included in the development of new insurance products and services. They will have different thoughts about consumer needs than older employees, and will be able to offer valuable insights, no matter their years of insurance experience.

Insurers can also take inspiration from other industries. For example, a pizza chain is promoting its new “drop a pin” service so consumers can have pizzas delivered to places without addresses, like the beach or a park. How can insurers leverage “drop a pin” flexibility to better service their policyholders?

As insurers contemplate the best way to meet the needs of all generations, there are some key takeaways to keep in mind:

  • Most consumers want all-in-one apps or websites featuring everything they need.
  • Most consumers prefer the speed of digital payment options.
  • Consumers don’t want long or redundant processes. If they submit information one way, they don’t want to have to resubmit information yet another way.
  • Preferred communication channels vary by generation, but text messages are especially popular with younger generations.

To meet digital generational preferences, insurers need the right tools. And with nearly nine in ten American consumers of all ages using one or more digital payment methods11, it is critical for insurers to prioritize digital payment transformation. Are you ready to modernize your payment offerings to meet your policyholders’ needs? At One Inc, we provide seamless digital payment experiences that allow insurers to deliver ease, speed, and convenience to their customers. Learn more.

Want a quick snapshot of the generational preferences affecting the insurance industry and how each generation feels about carriers’ digital services? Download our infographic The Digital Disconnect of Insurance.  


  1. Korn Ferry - https://ir.kornferry.com/news-events/press-releases/detail/34/age-and-tenure-in-the-c-suite-korn-ferry-study-reveals
  2. Pew Research Center - https://www.pewresearch.org/short-reads/2019/01/17/where-millennials-end-and-generation-z-begins/
  3. Comm Bank - https://www.commbank.com.au/articles/newsroom/2023/06/CBA-More-Gen-Z-research.html
  4. Mitto - https://www.prnewswire.com/news-releases/two-thirds-of-gen-z-favor-text-messaging-over-email-during-ecommerce-interactions-301573371.html
  5. Chase – https://media.chase.com/news/consumers-rely-more-and-more-on-mobile-banking
  6. D. Power - https://www.jdpower.com/business/press-releases/2022-us-claims-digital-experience-study
  7. Statista – Statista, Consumer Insights Global Consumer Survey - United States of America' 2022, Update 4
  8. Pymts.com - https://www.pymnts.com/wp-content/uploads/2020/09/How-We-Shop-Measuring-The-Rapid-Digital-Shift-September-2020.pdf
  9. The Federal Reserve, “Economic Well-Being of U.S. Households in 2021,” May 2022
  10. The Federal Reserve - https://www.frbsf.org/cash/publications/fed-notes/2023/may/2023-findings-from-the-diary-of-consumer-payment-choice/
  11. McKinsey - https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/consumer-trends-in-digital-payments

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