What's Happening?
Life insurers are shifting their focus from traditional income replacement products to wealth planning and personal care funding solutions, according to Swiss Re's latest sigma report. This change is driven by the aging population, with 27% of people
in advanced markets expected to be over 65 by 2050. Insurers are expanding coverage models, such as bundling senior-targeted cancer coverage with health or annuity plans in Asia. The report highlights the 'silver economy,' where insurers must innovate to serve an older, wealthier, and longer-living generation. The population aged 65 and above in advanced markets is projected to rise by 35% between 2025 and 2050.
Why It's Important?
The shift in focus by life insurers reflects the changing demographics and needs of the population. As people live longer, there is an increased risk of outliving savings, necessitating new financial protection strategies. This evolution in insurance products can provide retirees with more comprehensive coverage, addressing both medical and financial risks. The adaptation to the 'silver economy' can lead to stronger investment returns and support economic stability. Insurers that successfully innovate to meet these needs can gain a competitive edge in the market, while consumers benefit from enhanced security and peace of mind.
What's Next?
Insurers are expected to continue developing products that cater to the decumulation phase, where retirees convert savings into income streams. There will likely be increased demand for long-term care and health protection, prompting further innovation in insurance offerings. As the population ages, insurers may collaborate with healthcare providers to offer integrated solutions that address both financial and health needs. The industry may also see regulatory changes to support these new models, ensuring that they meet the evolving needs of consumers.
