Aging populations and declining birth rates are reshaping the financial protection needs of individuals, according to Swiss Re’s latest sigma report.
The study finds that by 2050, 27% of people in advanced markets are expected to be over 65, prompting a shift in life insurance from traditional income replacement and family protection products to solutions focused on wealth planning and personal care.
“The impact of the silver economy on insurers will accelerate, leading to a new phase of innovation,” said Paul Murray (pictured above), CEO of Swiss Re Life & Health Reinsurance.
He noted that the current generation of retirees is larger, living longer, and entering retirement with more wealth than previous cohorts. Murray explained that the insurance sector has an opportunity to redefine its relevance to those over 65 by adopting new approaches to product design and delivery.
Swiss Re’s analysis highlights that populations are aging rapidly worldwide, with advanced markets projected to see a 35% increase in people aged 65 and older by 2050 compared to 2025. Japan and South Korea already have more than 30% of their populations over 65. In the United States, households headed by individuals aged 55 and above now control nearly US$120 trillion in assets, a figure equal to four times the country’s GDP.
In Asia, the demographic shift is especially pronounced. The proportion of the population aged 65 or older is expected to approach 20% by 2050, up from just 6% in 2000. This transformation is driving insurers to rethink product offerings for health, long-term care, retirement, and legacy planning, as changing family structures and caregiving responsibilities alter risk profiles.
“Longer lifespans will affect both the risk and asset side of the insurance business,” said Jérôme Jean Haegeli, Swiss Re’s group chief economist. He explained that as populations age and people begin to draw down their savings, inflation and long-term interest rates could rise, potentially supporting stronger investment returns and profitability for insurers.
The report outlines a transition in insurance needs from the accumulation phase, which covers working years and focuses on building wealth and protecting dependents, to the decumulation phase after retirement. During decumulation, the focus shifts to converting savings into income streams, such as pensions and annuities, and securing access to personal care services.
Swiss Re notes that by 2050, a high-income 65-year-old in advanced markets could expect to live another 23 years, increasing the risk that retirees may outlive their savings as guaranteed pension returns become less common.
To address longevity risk, Swiss Re suggests that a broader range of annuity products and longevity risk-sharing pools may be required. These solutions could help manage mortality, longevity, and health risks for retirees.
The report also points to the rising demand for long-term care, as the number of people aged 80 and older in Europe is projected to grow by 80% by 2050, while North America could see an increase of more than 120%. Long-term care already accounts for over 2% of GDP in advanced economies, and private nursing home costs in the US average US$111,000 per year.
Swiss Re observes that underwriting long-term care is complex, but products that supplement state provision or bundle care with critical illness and life coverage have gained traction in markets like France.
Another area of concern is cancer protection for older policyholders. The median age for cancer diagnosis is 67, yet most critical illness policies expire before retirement. Swiss Re notes that some insurers in Thailand and Korea have introduced cancer-specific coverage for seniors, often bundled with broader health or annuity products, to address this protection gap and ensure older households are not left to manage the financial and medical burden alone.
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