After many years of constant population growth, the most recent demographic analyses are forecasting a progressive slowdown in population growth, with differing impacts across countries.  A reduced birth rate coupled with increased longevity will lead to a modified population pyramid and an increase in older age groups relative to younger ones. These changes will have significant impact on current social habits and lifestyle, modify the roles of urban and rural areas, and change the working environment. The increased older population will lead to new healthcare needs, while the younger and more digitalised generations will have different, and possibly reduced, consumer spending behaviours. This inter-generational divide should not be seen in isolation but should be considered in combination with other significant trends such as climate change, geopolitical dynamics and digitalisation.

This position paper of the Emerging Risk Initiative (ERI) of the CRO Forum seeks to provide an understanding of what insurers can do to work with these changes. The paper considers the risks and opportunities of the main social and demographic trends, their implications on the insurance sector, the required business and operational changes and enablers.

Life and Health sectors are most impacted by demographic developments and need to rethink Life and healthcare propositions, as well as the savings and pension offerings for different generations, and the funding of long-term care. Property & Casualty (P&C) insurers will need to rethink the new mobility model for both younger and older generations, together with the workspaces and work models adopted in an increasingly digitalised environment. Operational challenges will range from adapting product design and distribution models, to embracing new ways of working.

In thinking through how the impact of future demographic developments may unfold, insurance companies need to prepare themselves for a wide range of scenarios to ensure a high degree of resilience in the face of much uncertainty. The insurance industry has an essential role in making society more risk resilient, by increasing awareness of future trends and risks amongst policy makers and the general public, whilst providing mitigation through risk coverage solutions. This paper further reiterates the importance of the social dimension present in future risks and how the Environmental, Social and Governance (ESG) perspective is critical for mitigating such risks and the impact they may have.


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