By 2050, more than a quarter of the population in advanced economies is expected to be over the age of 65, according to Swiss Re’s latest sigma report. This demographic shift, often called the "Silver Economy," is set to reshape the life insurance industry as it adapts to an older and wealthier customer base.
Swiss Re notes that increasing life expectancy, declining birth rates, and a growing concentration of wealth among retirees are key trends driving the need for new insurance solutions. The report suggests the industry will need to move from traditional income replacement products to offerings focused on wealth planning and personal-care funding.
Paul Murray, CEO of Swiss Re Life & Health Reinsurance, said: “The impact of the silver economy on insurers will accelerate, leading to a new phase of innovation. We are seeing a generation that is larger, living longer, and arriving at retirement wealthier than we have seen before. With new approaches to product design and delivery, the insurance industry has the opportunity to redefine its relevance to over 65s.”
The report highlights that in advanced markets, the population aged 65 and above will increase by 35% from 2025 to 2050. Countries such as Japan and South Korea already have more than 30% of their citizens over 65. In the United States, households aged 55 and above control nearly $120 trillion in assets—about four times the national GDP—demonstrating both financial strength and the scale of the longevity challenge.
Jérôme Jean Haegeli, Swiss Re's Group Chief Economist, stated: "Longer lifespans will affect both the risk and asset side of the insurance business. As populations age and people begin to draw down savings, inflation and long-term interest rates may rise, supporting stronger investment returns and profitability for insurers."
The shift from the accumulation phase—when individuals build wealth during their working years—to the decumulation phase—when retirees convert savings into income streams—will be central for insurers. The report points out that while products like term life and whole life are designed to protect dependents during the working years, retirees need mechanisms such as pensions and annuities to provide income after retirement. With high-income individuals retiring at 65 in advanced markets potentially facing another 23 years of retirement, there is increased risk of outliving savings as guaranteed returns on pension products decline.
To address these challenges, insurers may need to expand annuity options and introduce longevity risk-sharing pools that can manage mortality, longevity, and health risks together.
The ageing population will also increase demand for long-term care. In Europe, the number of people over 80 is expected to rise by 80% by 2050; in North America, it will grow by over 120%. This trend will put additional pressure on long-term care services, which already make up more than 2% of GDP in advanced economies. In the US, private nursing home care averages $111,000 per year, prompting a need for new funding solutions.
The report observes that underwriting long-term care remains complex due to product duration and uncertainty. In France, combining private long-term care insurance with state provision has gained popularity, leading to 1.4 million policyholders and more than €500 million in annual premiums. Distribution through banks and digital channels has supported this growth.
Cancer protection is another concern for older policyholders. Since the median age of cancer diagnosis is 67, but most critical illness policies end before retirement, a coverage gap exists. In response, some companies in Thailand and Korea offer cancer-specific coverage bundled with health or annuity products aimed at seniors.
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Swiss Re emphasizes that the information provided is for informational purposes only and does not reflect its official position or guarantee accuracy or completeness.