Insurers not servicing society's ageing wallet adequately: Swiss Re
Source: Asia Insurance Review | Jun 2017
A study by Swiss Re has found that society bears the largest portion of the total amount spent on the retirement needs of people aged 65 and over, to supply their income, provide for their health and social care, and cover the inheritance they aim to pass along.
Society accounts for approximately 70% (60% state; 10% family) of the ageing wallet, and savings accounts for another quarter of it. Insurance has a fractional share of the ageing wallet – around 5%, according to the study which covered six markets (USA, Japan, China, Germany, Australia and UK).
Swiss Re said the costs of public provision are projected to become “unsustainable” if current policies do not change in the face of demographic shifts and other factors, such as high sovereign debt.
While the industry has generally focused on selling products like annuities and attempting to create a market for traditional long-term care insurance, the report called on (re)insurers to “provide relevant and useful solutions that are accessible to consumers, mitigate some of the costs of ageing and effectively compensate people when things don’t go according to plan”. “If insurers want to increase their ageing business, they will need to find new ways to provide relevant and attractive new paths to financial security for older people, rather than purely fight for market share among traditional competitors,” the report said. A