Consumer demand for insurance and financial wellness resources continues to grow, and Gen Z is leading the charge in more ways than you might think. 

Research from the 2024 PYMNTS Intelligence Report shows that nearly 44% of Zoomers are more interested in buying insurance from their primary financial institution than they were three years ago. They’re also four times more likely than other age groups to consider insurance an important criterion of choosing a financial partner in the first place. 

And while demand for insurance has changed in recent years, so have the needs (and career paths) of consumers. And it turns out some of the changes are big. 

Who do we mean by the toolbelt generation?

The toolbelt generation refers to younger adults—particularly Gen Zers—who are turning to skilled trades instead of higher education for their livelihood. 

The proliferation of generative AI, the increased cost of higher education, and the general economic uncertainty that comes with our post-pandemic world have all driven younger generations to take a long, hard look at their career paths. 

It’s no longer viable for many to take on debt to get a four-year degree they may or may not actually use. This has led many in Gen Z to start pursuing opportunities in the skilled trades. 

This shift bears out in the data too, with research from the National Student Clearinghouse Research Center showing that the number of students enrolled in vocational-focused community colleges increased by 16% from 2022 to 2023, with that figure likely to continue to grow.

Gen Z characteristics that led us here

Aside from the rising costs of college and worries about incurring student loan debt, Gen Z and younger have also had a very different upbringing from previous generations. This has given rise to new attitudes about what it means to be successful—and how to get there. 

Research from Junior Achievement and Citizens found that nearly half (49%) of teens surveyed believe a high school degree, trade program, two-year degree, or other enrichment program is the highest level of education they need to be successful. Furthermore, a full 56% believe that real-world and on-the-job experience is more valuable than a degree

This represents a dramatic shift from the focus on higher education for millennials and older generations. Costs are higher, wages have stagnated, and the ways people used to work towards the American dream are becoming less viable. 

Of course, it’s not all doom and gloom. A job in a skilled trade also lets people work with their hands to create something or learn a new skill. After all, not everyone enjoys sitting behind a desk all day. Working hours are also more prescriptive, often with the chance to earn overtime if the need arises. In an always-on world, the chance to clock out and disconnect can be a huge boon to mental health.

Trades and the skills people learn from them are also useful outside of working hours. We all have a friend who can be counted on for help with house repairs or a vehicle, and these types of skills are unlikely to lose their demand anytime soon.

What does this mean for peoples’ financial picture?  

For starters, 85% of consumers are ready to accept help on the path to financial wellness, and this desire is even more pronounced for Gen Z. They’re true digital natives who’ve enjoyed the power of the Internet their whole lives, and that ability to learn for themselves has led to an increased focus on becoming financially savvy.

How does this affect peoples’ career paths? 

Younger people are increasingly wary of the value degrees provide, with a whopping 86% of US workers with student loans saying their degree wasn’t worth the toll debt has had on their well-being.  

Couple this with the fact that more than half of Gen Zers believe it’s possible to get a well-paying job without a degree, and you have a recipe for more and more people putting down their laptop to pick up a welding torch instead. 

How does this change how people insure themselves? 

Gen Z are tech savvy, financially aware, and they want to work with institutions they trust.  

In truth, 39% of consumers say the most important factor in selecting a bank or credit for insurance is that they trust the institution. Couple that with the fact that 63% of Gen Z are interested in buying insurance from their financial institution, and you have a huge opportunity to win over a primed audience.  

But how?

Engaging the toolbelt generation to help them grow on their financial journey 

It turns out the best way to engage Gen Z on their path to financial empowerment is to grow your platform and offerings right alongside them. Focus on offering insurance products and resources in a way that fosters their sense of independence and validates their financial savviness. 

For starters, personalized marketing and truly relevant messages are well-received and lead to both engagement with your business and growth for the individual. Zooming out slightly, younger generations also crave a modern customer experience when it comes to banking.  

That includes creating a seamless multichannel experience, providing financial education and resources, and offering tailored products that address their greater financial needs.

Laying the foundation for a symbiotic relationship 

Just as Gen Z has broken the mold on education and employment, they’re also ready to become more engaged than ever with their financial lives.  

Being a trustworthy partner in that endeavor will attract new people to your organization, help retain the ones you have, and foster a sense of trust and loyalty that will persist as Gen Z gives way to even younger generations. 

If you’re interested in expanding your financial protection products to attract younger consumers, sign up for a Virtual Product Roadmap Walkthrough below. We’re happy to discuss the financial wellness products your financial institution can offer to engage new consumers.

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