Technology’s Role in Insurers’ Response to the Growing Elderly Demographic
According to the World Health Organization, between 2015 and 2050, the proportion of the world’s population over 60 years of age will nearly double from 12 percent to 22 percent and will have an effect on numerous industries, but the insurance industry is in a position to be impacted more than most.
With the elderly population growing, countries face a new set of macro challenges which include:
An economic strain on the welfare state
An economic strain on individuals and their families
A desire to live independently
Limited technology literacy
From a macro perspective an aging demographic presents a range of challenges, and the insurance industry is well placed to address them. Insurers, potentially even partnering with InsurTech startups already exploring solutions, can address the aforementioned challenges faced by the elderly demographic in three key ways.
Care provision: Currently providing care to the elderly requires large amounts of spending from both governments and families. This finding presents insurers with an opportunity to identify tech-based value-added services that provide customers with more affordable care solutions. We are already seeing companies such as AXA move into this space with its backing of the venture called Birdie. The startup, which closed a €7M funding round in 2018, describes itself as a “care technology platform that supports care professionals and families in delivering better and safer elderly care at home.”
Prolonging people’s health: As people grow older they are more susceptible to chronic diseases, and those with critical illness cover will claim on their policy in such situations. Therefore, aging leads to increased essential illness claims. Why not limit such risk by moving from delivering protective offerings to providing preventative solutions? For example, the use of mental exercises can reduce the risk of dementia. Additional solutions are emerging to solve these problems within the market parameters. The startup company Savonix is partnering with Life insurers to provide cognitive assessments to its customers. The partnerships aim to test insureds cognition and improve it in the long run.
Increasing elderly independence: It’s clear that the elderly value his/her privacy and independence. Today, most homes are not designed to support this type of lifestyle for the elderly. Therefore, Insurers have an opportunity to supply this segment with the tools necessary to live independent lives. This could be in the form of smart home devices or even well thought through wearables devices that allow the elderly to be better connected to other people. For example, RGA has partnered with a company called Kraydel, which aims to provide a solution to this specifically. Kraydel provides a technology that allows the Elderly to make video calls to friends and family through their televisions.
Changing attitudes towards the aging population and generally increased levels of technology awareness are all factors driving change. Insurers willing to innovate within the sector will be well placed to take advantage of the current shift. The challenge for insurers is not to wait until the problem is upon them but to start to build the innovation required into the business now addressing immediate needs and creating a strategy to address the future needs of our population in years to come. This will involve focusing less on risk transfer products such as health and life insurance and investing more in products/services that can improve the quality of life for the elderly. This, in turn, will allow them to stay relevant and connected to this segment throughout its life.
Please click here to read the article.