Source: insurancebusinessmag.com

According to Swiss Re, Asia’s demographic landscape is shifting as the population ages at an accelerated pace. This transformation is reshaping insurance needs across health, long-term care, retirement, and legacy planning.

There is only 6% of the region’s population was aged 65 or older in 2000. By 2025, this share is expected to reach 10%, and projections indicate it will approach 20% by 2050.

Swiss Re notes that this demographic shift is not just about numbers. Changes in family structures, caregiving responsibilities, and gender disparities among the elderly are influencing risk profiles.

The gap between life expectancy and healthy life expectancy is widening, presenting persistent challenges for maintaining health in later life. As older populations grow and the proportion of younger people declines, insurers face a changing risk landscape and a need to redefine their role in society.

The region’s aging trend is also driving growth in the life insurance market. Swiss Re’s Sigma report from 2024 projects that global life insurance premiums will reach US$4.8 trillion by 2035, up from US$3.1 trillion that year, with higher interest rates and demographic changes fueling this expansion.

The retirement of the baby boomer generation is raising concerns about a widening savings gap, as there is a significant difference between what people should save and what they actually save for retirement.

Asia’s older demographic at a crossroads

Despite the evident demand, insurance products targeting older adults in Asia have not kept pace with the needs of this demographic. Swiss Re’s Protection Gap data shows that as people age, their protection priorities shift, but actual insurance uptake remains low. Barriers include product-customer mismatches, consumer mistrust, inertia, and distribution challenges.

Many policies are still issued to younger, healthier individuals, while distributors often avoid engaging with older customers due to underwriting complexities.

Swiss Re also observes that improvements in life expectancy have slowed since 2010. The factors that previously drove mortality improvements may not have the same impact in the future, requiring insurers to reassess how they manage longevity risk and price products for aging populations.

Insurers in Asia are increasingly investing in market research and product development to tap into the expanding “silver economy.” Drawing on lessons from more mature markets, they are introducing products such as long-term care insurance and annuities aimed at the over-50s segment.

However, Swiss Re observes that product success remains limited – particularly for long-term care insurance, which has struggled to balance profitability with consumer value.

To close the protection gap, Swiss Re suggests that insurers must develop a deeper understanding of the aging process, focusing on affordability, underwriting complexity, and portfolio sustainability. The industry is well-positioned to address the needs of older customers, but success will require coordinated action and innovation.