Aegon believes that longer lifespans will have a big impact on society. A new report by insurance think tank, the Geneva Association, finds that insurers, like Aegon, have a key role to play in addressing the challenges and opportunities of the ‘longevity revolution’.
The report, Insurance and the Longevity Economy: Navigating protection in the era of 100-year lives, is based on a survey of 15,000 individuals across 12 countries spanning Asia, Europe, and the Americas. As major demographic shifts take place around the world, the report highlights significant differences in how people perceive longevity.
People in the most developed countries typically underestimate their life expectancy, while people in developing countries tend to overestimate it. Most survey participants expressed concerns about the risks associated with longer lifespans — primarily regarding healthcare and savings — yet many overrate how ready they are to address these risks.
These findings are in line with a growing body of research. A 10-year research initiative by Aegon in collaboration with nonprofit Transamerica Institute and its Transamerica Center for Retirement Studies highlighted the need for a social contract involving individuals, governments and business to support a society where people can live healthier and financially secure for longer. Current research from the Transamerica Institute illustrates how this need is intensifying amid today’s turbulent economy and rapidly evolving world.
Aegon has adopted a single, clear purpose: Helping people live their best lives. Rather than looking at it from a more traditional insurance industry risk point of view, we have for several years viewed longevity, aging, and changing life patterns as an opportunity for our customers, our employees, and society. And we want to support as many people as possible in building the financial means to explore the possibilities and challenges of a long and varied life.
Adrita Bhattacharya-Craven, Director Health & Demography at the Geneva Association, commented: “While people recognize the risks of longer lifespans and the role that insurance can play in addressing them, turning that awareness into action remains a challenge.”
To help bridge the gap, Bhattacharya-Craven says it is important for insurers to offer solutions that address the complex dynamics of life expectancy challenges. These include outliving savings, losing physical independence, or adapting to evolving work patterns. By focusing on the intersections of health, wealth, and longevity, insurers can bolster productive employment years, facilitate smoother retirement transitions, encourage physical independence, and enhance public care systems.
A significant focus of the Geneva Association’s new report is on insurance solutions that promote prevention and flexible savings mechanisms. Enhanced group healthcare plans can play a crucial role in maintaining physical health, while new savings models can blur the lines between accumulation and decumulation phases, allowing individuals to manage their finances more fluidly as they age. Bhattacharya-Craven also highlights the critical differentiation between longevity and ageing. "Longevity speaks to a broader demographic shift, not just the individual process of ageing," she explains. “Insurers must recognize this difference and provide comprehensive support for extended lifespans, without falling into the narrow confines of chronological ageing.”
The narrative around insurance also needs to shift from indemnifying losses to a proactive model of risk mitigation. Bhattacharya-Craven calls for products that not only cover losses but prevent them, aligning with consumer needs for extended autonomy and distinctive life experiences.
Technological innovations and demographic changes offer significant opportunities for insurers to transform conventional models. However, privacy concerns and data usage remain hurdles that must be navigated carefully. While data is crucial for managing risk efficiently, conversations surrounding its use need to balance privacy with enhanced, affordable insurance offerings.
The Geneva Association's report serves as a call to action for insurers to embrace longevity. By adopting innovative strategies and fostering collaboration, the insurance industry can effectively address the challenges posed by increasing longevity, ensuring that extended life spans translate not just to longer lives, but healthier and more prosperous ones. Through bold innovation, insurers will be at the forefront of navigating the demographic shifts shaping our future.
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About the Geneva Association
The Geneva Association is the only global association of insurance companies; its members are insurance and reinsurance company CEOs. Aegon’s CEO, Lard Friese, is Vice Chairman of the Association.