Going forward, carriers will need to carefully consider how they design, model, and price longevity products to meet economic targets and reduce downside risk over the long term as lifespans keep rising.
A confluence of demographic and economic trends make longevity risks perhaps the biggest growth opportunity for insurers, but writing such long-tail coverage profitably also might present the industry with its biggest challenge in the decades ahead.
Retirement financing and securing lifetime income are the main objectives for most annuities holders today, according to the latest “Voice of the Insurance Consumer” survey by Deloitte’s Center for Financial Services. That means the stage is already set for potentially dramatic market expansion, given estimates by the Pew Research Center that roughly 10,000 Baby Boomers will turn 65 every day between now and 2030.
Related: Americans are getting older, and that’s worrisome
Add to that phenomenon the potential for ongoing lifespan extensions due to continuing advances in medical care, as well as expanding access to health insurance and wellness programs driven by the Affordable Care Act, and one can see why longevity should become an even more widespread and pressing concern.
Worries about living too long
