Insurance billing needs a Gen Z makeover

Gen Z is entering a new chapter of adulthood: purchasing homes, managing their own insurance policies, and becoming responsible for a growing set of financial commitments. As they embrace these new, necessary engagements with service providers, they bring with them their digital-first expectations that have governed their interactions to date.  For insurers in particular, this presents both a challenge and an opportunity.

Gen Z grew up with social media, Venmo, Amazon Prime, Netflix, DoorDash, and similar platforms that have conditioned them to expect a mobile-first, highly-personalized digital experience. Unfamiliar with the more cumbersome login processes, paper billing statements, or manual payment settings — these "digital native" consumers want a fully digital engagement. InvoiceCloud research finds that while the majority of insurers (75%) recognize that younger customers want fully digital experiences, legacy systems and cautious adoption of modern billing tools have created a disconnect between what insurers offer and what policyholders expect.

To close this gap, insurers must take a fresh look at the billing and payments experience. Far from being just a back-office function, billing is now a critical touchpoint for customer satisfaction, retention, and brand perception. Recent findings from J.D. Power's 2025 U.S. Home Insurance Study reinforce this point: when insurers clearly explain premium changes and offer ways for customers to manage costs, satisfaction climbs to an average of 721 on a 1,000-point scale. A modernized, digital-first approach to billing can help insurers engage Gen Z more effectively while also laying the groundwork for innovations that will serve all policyholders in the future.

Breaking through digital transformation barriers

One of the biggest challenges insurers face is not technological, but cultural. Many organizations still view billing modernization as a nice-to-have rather than a strategic priority. To change this, insurers need to build internal awareness and education around the billing and payment experience's direct influence on customer loyalty. For digital natives, a poor billing experience is more than an inconvenience; it's a reason to switch providers. Making the case internally for an investment in digital billing solutions is the first step to bridging the generational expectations gap.

Offering frictionless payment options

For Gen Z, convenience is key. Insurers can no longer rely solely on traditional methods like paper checks, mailed statements, or in-person payments. According to a 2025 GOBankingRates survey, only 26% of Gen Z has ever written a check. Insurers must meet customers where they are: mobile wallets, peer-to-peer payment platforms, and one-click recurring options that remove unnecessary friction. These features don't just improve satisfaction; they reduce late or missed payments, benefiting both policyholders and insurers.

Embracing proactive, digital engagement

Gen Z is accustomed to real-time communication. Whether it's a notification that a package has shipped or a text alert about a rideshare driver's arrival, these touchpoints create a sense of control and confidence. Insurance providers can adopt similar tactics by using reminders, push notifications, and email alerts to prompt timely payments and keep policyholders engaged. 

Proactive digital communication helps insurers reduce collections activity while strengthening their relationships with policyholders.

Building flexibility for the future

The payments landscape is evolving rapidly — and Gen Z will continue to drive that change. Emerging technologies, from buy-now-pay-later options to digital currencies, are already reshaping how consumers think about financial transactions. Insurers that invest in flexible platforms capable of integrating with new payment methods will be better positioned to keep pace with customer expectations and stay competitive. Future-proofing billing systems today ensures insurers can adapt quickly as innovations take hold — and sets the standard for all digital-native generations to come.

A strategic imperative for the next generation

Modernizing billing may once have seemed like an operational upgrade. Today, it is a strategic imperative. Insurers that embrace a mobile-first, customer-centric billing approach stand to gain more than just on-time payments. They can improve the overall policyholder experience, strengthen brand loyalty, and drive renewals in a market where younger generations are increasingly making their mark.

For Gen Z, the billing experience is the customer experience. Insurers that recognize this and act decisively will be the ones best positioned to win and retain the next generation of policyholders.