Life Insurance
A Growing Need
Limra’s Hartshorn: Asia, Latin America challenged by their burgeoning senior populations.
Governments around the globe are stressed by rising numbers of older people, many who lack financial support but are likely to live longer than previous generations, said Larry Hartshorn, corporate vice president and director, corporate research, Limra and Loma. Hartshorn spoke with AMBestTV at the Limra Loma conference in New York.
The population in the Latin American markets, the ages 60 and over, in the next 15 years, will surpass those 15 and under. That puts a lot of financial stress on the marketplace.... In the next 20 years, the age 60-plus population in Asia will triple.
Larry Hartshorn
Limra and Loma
LIMRA has done a lot of research in recent years on retirement trends in Latin America and Asia. What were some of the findings?
The retirement aspect is a global trend. Latin America, Asia probably more than others. There's really three big findings, three reasons why we're doing this. There's a lot of economic stressors. The government sponsored pension funds are having to take a close look at their own solvency. Very often, the result is individuals having to take more responsibility for their own financial security.
Second reason is medical advancements. Longevity, life expectancy is increasing. The middle market's increasing at the same time in a lot of markets. For those that can, they can participate more in their own health care, but the stressors are there nonetheless.
The third reason, and perhaps the biggest reason, is the rapid pace of aging. The population in the Latin American markets, the ages 60 and over, in the next 15 years, will surpass those 15 and under. That puts a lot of financial stress on the marketplace for the working population to contribute into those government sponsored systems, but then a lot of pressure on that population to have to support themselves perhaps more than their predecessors. In the next 20 years, the age 60-plus population in Asia will triple. Those are the three big findings.
How do you find consumers are changing in those markets?
We've completed a market study across Asia, nearly 10,000 consumers, really identifying what do they feel their preparedness level is and what are they seeking, the products they're seeking, the benefits they're seeking. They're screaming for annuities, for lifelong guaranteed income. That's the same across all these markets in Asia. We're extending that exact same research to Latin America market now. We're just starting. We'll publish in 2019 and expect to find many of the same results.
However, consumers' cultural differences, I'm sure they'll be a little different. The Asian markets tend to have the very defined family structure. It was a big piece of financial security in older years. That's changing a bit. Latin America has very strong family culture, but it also has perhaps an even stronger friends and family. Who is that friends and family network? How do they connect? That doesn't always contribute to perhaps their individual financial security, but it is how referrals are done. It is how this industry interacts with that consumer group.
Based on your research, what would you say the big takeaway is for life insurers doing business in emerging markets?
Globally, consumers are in charge. We've all heard the term consumerism. It's not new, but it is perhaps most relevant right now. Social networking, digital life. What is the definition today of friends and family? It includes the digital family.
The industry players have to accept that, acknowledge that, and realize that their avenue into engaging with customers, growing customers, keeping customers happy is truly the definition of consumerism. The consumers are going to say what they want. Can we meet that? We're trying to do more and more consumer research to help along that way. Yes, the industries have been responding quite well.
