Unlock the potential of the Silver Economy by tapping into these four customer needs
A few months ago The Geneva Association hosted their annual Health & Ageing conference at MAPFRE in Madrid. Attendees enjoyed speakers from all over the world; from Xing Xiao, Executive Director and Deputy General Manager at China Taiping to Julia Randell-Khan of the Stanford Centre for Longevity. And of course, speakers from leading European insurers such as Allianz, Aviva, AXA, MAPFRE and Swiss Re. DIA co-founder Roger Peverelli was interviewed on stage about what the latest tech can do to help insurers tackle the ageing and longevity challenge. “Virtually everyone agrees that longevity is no longer a risk; it’s a predictable fact for most. But what insurers hardly realise is that ageing can potentially be a powerful source of economic growth.” So, what are the keys to unlocking this potential? How can insurers take up this challenge?
Reimagining longevity, to what extent is that already taking place?
Roger: “At ITC DIA Europe, we have an insurtech database consisting of 2,000 insurtechs. Noticeably, quite a few are working on reimagining longevity. But if we look at insurers, reimagining longevity is not really happening. Every carrier is investing in digital transformation to make the value chain more effective and more efficient. However, that is not about taking a different perspective, from risk to opportunity. Instead, it’s more about repairing the past, rather than about creating a future.”
Any exceptions, best practices?
Roger: “Of course there are exceptions. To name just a few: Aviva’s Wealthify offers online wealth management and is an integral part of Aviva.com. Munich Re offers an innovative white-label platform with savings and retirement products. Finally, LadderLife, a challenger from the US simplified the customer journey, which gave them access to a whole new generation of users.”
You argue that ageing can potentially be a powerful source of economic growth. How is that?
Roger: “Clearly there are two sides to the ageing and longevity coin; challenges and opportunities. While the pool of elderly becomes bigger, the younger generation is shrinking in numbers. With fewer people in the labour pool, pension acts, welfare systems and health systems become unsustainable. That is the challenge. But it’s not all gloom and doom. The 60-plus generation is not only the fastest-growing consumer group. They also enjoy increasingly higher spending power. According to McKinsey, the silver segment will represent 60 percent of consumption growth. And according to the European Commission, Europe’s silver economy is currently the third largest of the world, only behind the US and China. Worth 5.7 trillion euros by 2050. So, this silver economy is a golden opportunity.”
So, what are the keys to unlocking this opportunity?
Roger: “We already see that a fast-growing number of insurtechs, but also a few incumbents, are seizing the opportunity. What we see happening is that they are tapping into four key consumer needs: 1. Independence, 2. Health, 3. Care and 4. Safety. To elaborate on the first need; elderly want to stay independent. The solution is to interweave smart home devices with solutions so that elderly people can be self-sufficient at home for a longer time. For example, Italian insurer Reale Mutua created a condominium platform in Turin, which is an apartment building concept, with an array of home-related services, which also comes with digital healthcare services. Another example is Jane, from Belgium. They offer an interplay of motion sensors and AI to monitor for example medicine usage, fall detection, wander detection and toilet use, and connecting all to the care circle of course.”
The second consumer need you mentioned is Health?
Roger: “Yes. Numerous tech firms in our community encourage consumers to stay healthy. This leads to less hospital admissions, fewer outpatient visits, etcetera. There are generation-agnostic programs in place to support a healthier lifestyle offered by insurtechs such as dacadoo from Switzerland, Virgin Pulse, and not to forget the Vitality program created by Discovery from South Africa. Moreover, there are also many specialised initiatives. Neurotrack, for instance, a US health startup, developed eye-tracking technology to detect and monitor dementia. In a five-minute assessment, Neurotrack’s technology can assess cognitive decline before symptoms appear. Basically, predicting memory loss before it starts. It also includes a health program with tools and advice to reduce the risk of further cognitive decline. Again – the longer Alzheimer’s is staved off, the longer elderly can continue to live independently, and the lower the health costs. Neurotrack is among others used by Dai-Ichi Life, the second largest life insurance company in Japan, serving one of the world’s largest ageing populations.”
Can you also tell a bit more about tapping into the third consumer need, Care?
Roger: “Sure. When you think about care, you think of remote patient support and self-directed care. Care is shifting to a non-traditional care setting at home. Wearables can play a central role in this. The increasing popularity of these devices not only shows the need for more control and empowerment, but also the desire and readiness to take on a more proactive approach yourself when assessing symptoms, connecting with healthcare providers and self-care. Much more convenient, especially for the elderly. And of course, the business case is clear.”
So, leveraging connectivity is important. How is that with the fourth consumer need, Safety?
Roger: “You’re definitely right. Seniors want to remain at home, while their children want to be sure their parents are safe. Are the doors and windows locked? Has the oven been switched off? IoT, sensors, and connectivity are all part of the solution indeed.
But security is also about finances. Elderly fraud for instance. Suppose you have an ageing parent; EverSafe, a US fintech, warns you if strange transactions take place in your parent’s bank account. So that, thanks to AI, you have an ‘extra set of eyes’ – from a distance.”
What could the role of insurers be?
Roger: “Obviously, insurers and other financial institutions play a crucial role in what our life will look like in the silver economy. But it is also clear that taking care of the monthly pension payment or reimbursing a health treatment is insufficient. If insurers would really like to seize the opportunities that the silver economy offers, they need to give meaning to all these four need areas: ‘Independence – Health – Care – Safety’.”
How should they do that? Can you paint a picture of what that could look like in the future?
Roger: “Perhaps a future pension insurer will not only provide money, but also a range of services to make sure the elderly can stay in their home and that, if needed, care is available. The mortgage may turn into a housing plan in which the house, mortgage, renovation (to make things ‘Silver-proof’) and maintenance are combined into one product. After all, workers are scarcer than money. The scope of health and life plans may broaden; and perhaps even converge with home insurance.
Insurers can create new propositions including smart home solutions, property services and all kinds of personal healthcare services. Why only take care of payments if you can really make a difference for your customers?”
What does it take to get there?
Roger: “Upon closer inspection at some of the use cases I mentioned, it turns out they have three characteristics in common. First, all of them have new data streams at the core of the innovation. Second, they explicitly venture beyond the traditional value chain. And thirdly, the relationship with customers changes significantly, from a transactional to a relational, collaborative, and participatory model. And while we’re rearranging the furniture, let’s open some more windows as well. Take some time to look at how other industries respond to this attractive target group. Dating sites for 60+ for instance. Fast movers such as Unilever and L’Oréal created various products to ‘age gracefully’. These examples illustrate that when we’re thinking about the silver economy, we should not think of stereotypes, but instead think outside the box.”
The ageing population is not only about people who need very special care …
Roger: “Correct. Many elderly people now are much more vital than the elderly in 1980. They want to keep up, be independent, stay mobile and have a social life. Above all, they want to be happy. That is more important than just staying healthy at any cost.
Longevity may be the key concept, however, we shouldn’t define this just as ‘longer lives’, as measured in years, but in greater quality of life – at any age. Obviously, financial security and well-being play an instrumental role. And with nurturing physical, mental, and social well-being throughout life we’re already stretching it. But with the elderly more vital than ever, we should perhaps also take into account additional emerging customer needs such as lifelong learning and lifelong contribution. Growing, renewing, adapting to an ever-changing world, and creating value at every stage of life. That would be an even more compelling perspective.”