How will the ageing population change insurance?

By  Vero Insurance

With issues of health becoming more complex in this day and age, it’s important to look at how Australia’s ageing population is dramatically changing the face of society, offering up new opportunities for fast-moving businesses.

The sum of increasing life expectancy and declining fertility is an ageing population. In Australia, this will have an enduring and profound effect on almost every facet of life including health costs, the economy, pension schemes, education, work practices, technology and more.

According to the ARC Centre of Excellence in Population Ageing Research (CEPAR), life expectancy for women will rise to 89 by 2050 (for those born in 2050), from 83 for those born in 2010. Men will rise to 84, from 79.

This means there will be 7.2 million Australians over the age of 65 in 2050, compared to three million in 2010, and 1.1 million Australians over 85 in 2050, around four times the 2010 figure of 400,000.

As a result, Australian government expenditure on aged care will more than double to 1.8 per cent of GDP in 2050, from just 0.8 per cent in 2010. The labour force will fall from 65 per cent of adults (over 15) in 2010 to 60 per cent of adults in 2050, putting enormous strain on the tax system.

These changes, and many more, will have massive effects on matters related to insurance.

We spoke with experts in the field of ageing, insurance, health and the future, to offer some food for thought around areas of change and opportunity.

Wearable worries

“There are technologies such as wearables for ECG monitoring and fall detection that may benefit aged groups. Such technologies will increasingly be integrated into sensors that they can wear, or as part of their devices such as a home assistant. The risk will depend on the particular technology in use and needs to be determined case by case. A big concern is around privacy as the elderly population are vulnerable to people looking at their information, including those who care for them.”

- Bianca Phillips, academic lawyer at Swinburne Law School, specialising in medical and digital health law

Home and strata cover

“I’m on the wrong side of 60, so this is something I have thought about personally and professionally. Good financial advice is absolutely crucial, but more important to brokers is the fact that people rearrange their assets as they age. They downsize their house and restructure their lifestyles. It’s very important that assets are properly insured – including the quality of strata insurance as they move into apartments – on an ongoing basis throughout these changes.”

- Dallas Booth, CEO of NIBA

Live long and prosper

“Demographics is relatively slow moving, so things don’t always come as a surprise. But a real wild card would be if somebody figures out how to properly extend the healthy lifespan of humans. Researchers are working toward this right now. When people have the ability to enjoy the health of a 50-year-old all the way up to the age of 90, it will turn just about everything on its head.”

- Paul Higgins, futurist and founder of Emergent Futures

In the genes

“It is well known that genetic testing could be hugely beneficial. For example, a mother in her 70s wants to know if she carries a faulty BRCA gene that she may have passed on to her daughter and wonders also about the impact on her granddaughter. However, the concern around needing to disclose a pre-existing condition for insurance purposes could be a barrier to seeking the test in the first place. Insurance companies should consider how such barriers could impact insurance claims in a digital health environment, and the broader societal implications.”

- Bianca Phillips, academic lawyer at Swinburne Law School, specialising in medical and digital health law


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