The driving forces
So living long and in good health is a basic need, which is reinforced by the aging and prosperity of the population. More and more people recognize that it is possible to delay or prevent age-related diseases through targeted prevention and early detection. Finally, investments in start-ups specializing in longevity have seen significant growth in recent years, creating a true gold rush climate.
The longevity market is particularly developed in French-speaking Switzerland. Nestlé continues research into nutritional strategies that contribute to longevity, while Clinique La Prairie offers health care that extends longevity. Likewise, the World Economic Forum (WEF) and the IMD executive school regularly examine this issue.
Insurance companies are widely affected
But how is the insurance industry responding? The issue of longevity poses new challenges to almost all insurance sectors, especially health and life insurance companies. The economic implications are vast and complex: How can insurers offer products at affordable prices and provide protection tailored to extend life while maintaining good health? How can customers use insurance products to increase their savings and ensure financial security as they live longer? And how can insurance companies raise society’s awareness of the classic risks associated with old age and the need for preventive measures?
Forward-thinking insurance companies have already identified the various difficulties to be anticipated. Lifetime benefits will include medical “benefits” that may increase costs in the short term, while having a positive impact on the insured’s health and the cost of care in the medium and long term. However, this increase in life expectancy could have a “counterproductive” effect on the costs of declining health in the extended life phase.
Innovative approaches in life insurance
A classic example from the life insurance industry illustrates this challenge: how can insurance companies create new products without necessarily incurring higher costs? In particular, they could invest in a targeted way in hospitals or homes that would develop health programs dedicated to the elderly, exclusive rehabilitation offers or tailored care packages, or even offer, within their insurance policies, an option to have priority access to housing.
Swiss insurers must prepare for a sharp increase in the number of centenarians by quickly identifying challenges and opportunities in the longevity market, taking appropriate measures and developing specific products. By actively participating in long-term goals for healthy people, they can not only tap into this growing market, but also ensure their long-term financial stability.