A white paper jointly released by financial information portal Hexun and Taikang Insurance Group in late January showed that the younger generation has now become the major buyers of insurance policies, as over 70 percent of commercial insurance in China has been purchased by people aged 26 to 45.

Experts from China Insurance and Pension Research Center explained that the younger generation born in the 1990s are especially aware of the importance of security compared to the older generations, showing surging demand for insurance products, especially following the COVID-19 pandemic. As they have grown up in the digital age, online platforms will become a major distribution channel for insurance policies in the near future.

The proliferation of online financial platforms has provided much convenience for purchases, which is a major reason for the surge of wealth planning among the younger generation, according to experts from the Tencent Research Institute.

Research by consulting firm iiMedia Research showed that the number of online wealth management service users in China reached 670 million in 2022, which was 1.8 times of the number in 2015.

Meanwhile, 180 million Chinese citizens have opened personal accounts for securities applications by the end of last year, which was 3.5 times of the number in 2015. In light of the maturity of the Chinese securities market, the number of securities application users will exceed 260 million by 2025, iiMedia Research estimated.

Experts from market consultancy McKinsey said these online platforms have better-associated wealth management functions with daily life scenarios such as shopping or social occasions.

Meanwhile, the Generation Z group — those born between 1995 and 2009 — can accept new things more easily. Under the same logic, they can easily become the first users of online wealth management platforms, which are still in the early development stage. But as these platforms mature and upgrade, their user viscosity will increase, which means that the younger generation will become increasingly loyal to them.

Social media platforms such as Douyin and Xiaohongshu have become the major channels for Gen Z to acquire wealth management information or stay in tune with updates in the financial world, according to McKinsey.

This was especially noticeable in 2021 when portfolio managers were regarded as "idols" on the internet. "Star portfolio managers", such as Zhang Kun from E Fund Management, who dazzled with a performance purchasing certain Chinese liquor companies' stocks, reaped much attention online. Hashtagged topics were started for him on the micro-blogging platform Weibo, with a passion usually only seen for pop idols.

In light of this trend, McKinsey experts suggested traditional financial institutions reach into social media platforms that are most used by the younger generation. The institutions can either set up official accounts or work with internet influencers whose followers are mostly from Gen Z. Influencers can help traditional brands build a connection with the younger generation more rapidly.

"Gen Z in China equals an incremental market size of 300 million people. Traditional financial institutions such as securities firms must make their brand images younger to attract this group and make them their potential clients," said McKinsey.