GlobalData’s recent survey highlights a trend among younger generations towards a digital-first approach in car insurance. Traditional motor insurers are urged to adapt their practices to align with the expectations of younger customers. According to insights from insurtech company Charles Taylor, insurers can meet these evolving demands by leveraging new technologies such as gamification and AI.
According to GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, there is a notable generational shift in preferences regarding motor insurance. Among those aged 25+, a substantial 63.3% chose traditional motor insurance, while only 15.7% opted for a digital-only insurance provider. In contrast, the younger age group of 18–24 years displayed a different trend, with only 29.3% selecting traditional motor insurance and 24.4% favouring digital-only options.
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This data highlights a significant decline in the preference for traditional insurers among younger consumers, coupled with a rise in the adoption of digital-only insurance companies. Such trends should serve as a critical wake-up call for traditional insurers, indicating the urgency to adapt to the evolving market dynamics driven by a younger, tech-savvy consumer base that increasingly favours digital solutions over conventional methods.
According to Charles Taylor, Generation Z prioritises convenience, transparency, and solutions that seamlessly integrate into their digital lifestyles. To meet these expectations, insurance providers can leverage innovative technologies such as gamification and AI to create services that resonate with younger consumers.
Gamification, which is rapidly gaining traction, incentivises customers by allowing them to earn rewards, such as discounts, for demonstrating good driving habits. This approach not only engages younger drivers but also encourages responsible behaviour on the road. Additionally, the use of telematics enables insurers to offer lower premiums to younger drivers—a significant challenge for the insurance industry. Devices such as black boxes monitor driving behaviour, allowing insurers to provide quotes that reflect individual driving patterns, thereby encouraging a sense of accountability among customers.
Insurers can further enhance their appeal to younger consumers by adopting AI-powered claims systems. These systems streamline the claims process and offer greater transparency, which aligns with the expectations of tech-savvy customers. By utilising AI, insurers can provide a more efficient and user-friendly service, making the insurance experience more appealing to the younger demographic.
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By GlobalDataTo remain competitive against insurtechs and meet the evolving demands of modern consumers, traditional motor insurers must undergo significant technological transformations. Embracing digital solutions and innovative technologies is essential for these insurers to keep pace with the expectations of younger generations and to thrive in a rapidly changing marketplace.
