Gen Z is the most underinsured generation, despite risk of theft and loss

Key findings from our latest research:

• 17% of Gen Z (ages 18-27) have no insurance products at all, compared to just 9% of Millennials.
• 43% of Gen Z have experienced loss or theft of high-value items, yet only 13% have gadget insurance.
• Many Gen Zers avoid insurance because they believe it’s too expensive (30%) or too difficult to understand (12%).

Gen Z and their risky relationship with insurance

According to our latest research, Gen Z carries an average of £1,643 worth of valuable items, including iPhones, smartwatches, and gym gear, yet 85% don't have contents insurance and 87% lack gadget insurance. When items are lost or stolen, many in this age group are left to cover the cost themselves. 42% admitted they had to pay out of pocket for replacement items.

Alarmingly, 17% of Gen Z wrongly assume they’re covered under someone else’s insurance, such as their parent’s or landlord’s policy. This misconception leaves them vulnerable when unexpected losses occur.

Low insurance uptake, even for essential policies

When it comes to key insurance products, Gen Z falls behind other generations:

•    Only 15% have contents insurance.
•    24% have life insurance.
•    30% have travel insurance.

Interestingly, Gen Z seems to prioritize health over possessions, with 30% holding health insurance and 17% opting for dental cover. However, the gap in coverage for essential personal and home insurance could prove costly in the long run.

Why does Gen Z avoid insurance?

The reluctance to engage with insurance largely stems from common misconceptions. Many in this generation believe insurance is too costly (30%), think they’ll never need to file a claim (14%), or find the process too confusing (12%). Analysis of our own review data on Smart Money People also found insurance customers cited high costs and fees, alongside confusing communication, as the reason they left negative reviews about insurers. This perception could explain why insurance companies are struggling to attract younger customers.

Even more striking, 26% of Gen Z believe they’re more likely to fall in love than file an insurance claim, and 24% think they’re more likely to appear on TV. These statistics highlight just how far removed insurance is from their list of priorities.

The need to engage Gen Z

As Gen Zers approach their late 20s, they’re starting to earn more and accumulate valuable assets, from cars to homes. Yet, their lack of engagement with insurance could leave them exposed. Jacqueline Dewey, CEO of Smart Money People, emphasized the importance of the insurance industry rethinking its approach:

What’s next for the insurance industry?

Our findings show that there’s an opportunity for insurers to rethink how they connect with Gen Z. Understanding their priorities, communication preferences, and concerns will be key to successfully engaging this important consumer group. As this generation grows in buying power and begins to hit major life milestones, it’s vital that the insurance industry adapts its approach to build trust and provide relevant, accessible solutions.

About our research

1 - Smart Money People commissioned a survey of 2,000 UK adults in which 292 were aged 18 - 27 and are considered Gen Z. The OnePoll survey ran 28 August – 3 September 2024. OnePoll is an MRS Company Partner. 

2 - An analysis was conducted of Smart Money People’s 1-star insurance reviews left between September 2023 - September 2024.