Today’s young people will perhaps be referred to in years to come as ‘the COVID generation’. While the pandemic has hammered every sector of society hard, it will perhaps be today’s young that suffer the consequences far longer than the rest of us.
And perhaps the most pressing consequence they feel today is best described as ‘financial anguish’ since the pandemic had a disproportionately hard impact on those aged 18-35. Not every nation has taken steps to measure the financial downside of the pandemic on young people, but the UK’s Financial Conduct Authority has and it concluded that last year young adults and the self-employed saw their financial vulnerability rise by over 40%.
They lost their jobs and salaries, took on more debt, ran down their savings and stopped pension contributions at a far higher rate than other groups. Many of tomorrow’s leaders are being driven to accept a hand-to-mouth existence as the norm.
What hope is there to teach these people about the inherent value of insurance?
Many of these people feel that they have been let down. Fortunately a sizeable chunk appear to be fighting back by taking control of their own financial affairs like never before. They want security and to be masters of their own financial destiny. They also realise that they need to do things differently to the way generations before them did.
So how should insurers handle this? This is a group that has coped with COVID-19, the decline of older industries and jobs and the overall pervasiveness of FinTech in their lives. They are happy to buy, sell, invest, save, bank, communicate and wind down on the same small handheld device.
They understand at a far younger age the value of saving for the long term, they want to have a Plan B. They are more likely to sympathise with shareholder activism and the value of building a ‘home’ is far more important than a flash holiday and a fast car. Such hedonistic pursuits clash with their green/ESG-driven worldview.
Lower-for-longer interest rates have also driven them to look for savings and wealth accumulation through investment rather than savings. But they will not trust any old investment information that they find online – which they treat with great scepticism: Trust in online sources does not come easily.
The message for insurers in the Middle East in all of this seems both simple and long term. Appealing to this battle-scarred segment will involve insurers presenting a true face that celebrates the importance of being resilient and confident financially and how this feeds into personal physical and mental wellness. Insurers will need to present a brand image that is green and ESG compliant.
They will need to champion workplace diversity and offer a seamlessly digital experience to customers. They will also need to play their part in promoting the concept of insurance to the public.
And finally, they will have to appear to offer the sort of work environment to which today’s young people aspire. After all, every member of every C-suite of every insurer, reinsurer, broker and regulator a few decades from now is sitting somewhere today considering their life post-pandemic.
Whether insurance features in this future is in the hands of every member of every C-suite of every insurer, reinsurer, broker and regulator today.
Paul McNamara
Editorial director
Middle East Insurance Review