Life insurance will need to evolve from income-replacement and family-oriented protection products to wealth planning and personal-care funding solutions, according to a new paper from Swiss Re.<\/p>\n
The reinsurer\u2019s latest Sigma<\/em> report finds that ageing populations, declining birth rates and the growing concentration of wealth among seniors mean that by 2050, a high-income 65-year-old in advanced markets could expect to live another 23 years.<\/p>\n This longer retirement, combined with a shift away from guaranteed pension returns, means that while many retirees will have substantial savings, their income is not assured \u2013 increasing the risk they outlive their nest egg.<\/p>\n \u201cThe impact of the silver economy on insurers will accelerate, leading to a new phase of innovation,\u201d said Paul Murray<\/strong>, CEO of Swiss Re Life & Health Reinsurance.<\/p>\n \u201cWe are seeing a generation that is larger, living longer, and arriving at retirement wealthier than ever before.<\/p>\n …the industry has an opportunity to redefine its relevance to over-65s…<\/p><\/blockquote>\n \u201cWith new approaches to product design and delivery, the industry has an opportunity to redefine its relevance to over-65s.\u201d<\/p>\n The report projects that in advanced markets such as Australia, there will be 35% more people aged 65 and over by 2050 compared to 2025.<\/p>\n To meet the demands of the so-called silver economy, insurers will need to shift their focus from the accumulation phase of consumers\u2019 lives to the decumulation phase \u2013 when savings are drawn down to fund retirement.<\/p>\n \u201cIn the post-retirement decumulation phase, the emphasis shifts to converting savings into income streams, for example through government or employer-funded pensions and annuities,\u201d states the report.<\/p>\n \u201cIn addition, there is a need to secure access to personal care services, such as medical treatment and aged-care facilities.\u201d<\/p>\n Health<\/strong><\/p>\n Cancer protection for older policyholders is another urgent need according to Swiss Re.<\/p>\n \u201cThe median age of cancer diagnosis is 67, yet most critical illness policies expire before retirement, leaving a protection gap just when the risk is highest,\u201d state the report’s authors.<\/p>\n Thailand and Korea are cited as markets where insurers have launched cancer-specific products for seniors, bundled with health or annuity cover.<\/p>\n \u201cThese policies ensure older households are not left to bear both the financial and medical burden of cancer alone.\u201d<\/p>\n