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Insight
Title:
Customers are living longer, but not necessarily in as good health
Description:

Longevity is already on the increase as a result of improved life styles and health care. This trend could continue exponentially as a result of genetic engineering (some even say to the point of achieving immortality). At the same time, the rates of chronic diseases are also increasing.

This could be tremendously disruptive for existing solutions such as:

  1. retirement and annuitisation
  2. life insurance and assurance
  3. long-term care costs 

Baroness Greengross said: “Our society is in denial of the inevitability of ageing. We have put off the difficult decisions for far too long."

The problem extends beyond financial services, with claims that the countries health care, housing and transportation systems, amongst others are failing the elderly.

According to the ILAG UKprotection strategy report, December 2015

The number of people aged 85 and over is expected to double by 2030 (ONS).

There is a low fertility rate of 1.91, compared to a replacement rate of 2.075, which has been the case since the 1970s.

The baby boom generation is entering the over 65s market.

66% of the UK population is aged 15 – 64 and longevity is increasing.

Life expectancy has improved by 4% males and 3% females over the past decade, compared to 3% and 2% over the previous decade.

The main drivers for these improvements are attributed to:

  • Improved safety and regulations e.g. road, workplace, an increase in health and safety
  • Lifestyle changes eg smoking, drinking, activity
  • Increased awareness and preventative measures with illnesses e.g. vaccines, earlier identification and more efficient treatments, improved drugs
  • Anti-ageing technology

The State Pension Age is increasing to reflect these factors and more people aged over traditional retirement ages are remaining in work longer

Obesity is increasing and impacting health. Males with normal BMI reduced from 41% to 31% (1993 to 2010.) and women from 49% to 40%. (Source NHS).

According to research by Aviva:

  • In 1966 life expectancy at birth in the UK was about 69 for a boy and 75 for a girl. Today, cohort life expectancy at birth is 90 for a boy and 93 for a girl. The ONS has projected by 2066 it could rise to 97 for a boy and 100 for a girl.
  • In 1917 the monarch sent 24 birthday letters to centenarians. By 1966 there were 910 centenarians, and the ONS estimates there are 14,570 in 2016.
  • The state pension retirement ages of 60 for women and 65 for men were set in the 1940s.
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