Preparing for the
“silver tsunami”
Exploring the challenges and opportunities of an aging population in Asia
Preparing for the
“silver tsunami”
Exploring the challenges and opportunities of an aging population in Asia
Summary of the article ‘Moving from Aging to Aged Populations in Asia: Challenges and Opportunities for the Insurance Industry’ and (November 28, 2022) by Jinjing Ong, Tina Paap and Dr. Dipta Rai
Jinjing Ong
Associate Director Health Product Development Southeast Asia Markets
Tina Paap
Vice President Claims, RGA Asia
Dr. Dipta Rai
Director, Health Claims Management Southeast Asia Markets, RGA
Jinjing Ong
Associate Director Health Product Development Southeast Asia Markets
The global population is aging, with Asia expected to see the most rapid increase in elderly citizens in the coming decades. Lower fertility, longer life expectancies, and the rapid growth of the middle class all play a role – and there will be wide-ranging implications for the way societies are built and organized. Countries in the region need to prepare now to address the needs of older citizens to ensure they can age with dignity. But how can the insurance industry support and build on this opportunity?
The affordability challenge
The cost of care increases exponentially with age, with an estimated 25% of all healthcare costs incurred during the final three years of life. This presents a clear market opportunity to provide health protection products to a more affluent customer base – but the bigger challenge is providing coverage and care to individuals in a lower income bracket.
Longevity expectations make it difficult for insurers to design long-term products with any sort of guarantee. Preventive and rehabilitative care are important to mitigate the demand for acute healthcare from an aged population, but this requires insurers to use significant resources to manage their network and negotiate better prices with service providers.
Tina Paap
Vice President Claims, RGA Asia
Dr. Dipta Rai
Director, Health Claims Management Southeast Asia Markets, RGA
The business opportunity
Despite these challenges, the business opportunity – not to mention the social good – presented by serving an aged population has become significant enough for insurers to examine new solutions. Long term care insurance and retirement products are two well-established products designed with the aging and aged population in mind. Yet many insurers are also exploring more tailored products and innovative models to increase access to coverage.
In some markets, private insurers are partnering with government entities or riding on public social welfare benefits to reach more elderly people. The goal is to provide more holistic care services while keeping the additional cost of private cover affordable. For example, many insurers in China are either investing directly in eldercare communities or partnering with established eldercare providers to build eldercare ecosystems. One leading insurer took it a step further by introducing its own home-based eldercare brand, bundling eldercare services with insurance cover.
Insurers can tailor their products to this market by confirming they are:
- Simple – featuring simple underwriting and straightforward benefits
- Inclusive – covering higher entry ages and mild impairments common among the elderly
- Affordable – by covering only select illnesses or conditions, for example, with varying levels of co-payment, to keep costs low
Taking the time to develop tailored products for this market can provide security and greater peace of mind for elderly consumers as well as sustainable business growth for insurers.
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