Other silver products to insure the health of an ageing population

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2 Other silver products to insure the health of an ageing population Dr John Schoonbee, Chief Medical Officer, Swiss Re Europe Geneva Association 2013, Insuring the health of an ageing population

3 For age is opportunity no less Than youth itself, though in another dress, And as the evening twilight fades away The sky is filled with stars, invisible by day. Henry Wadsworth Longfellow, "Morituri Salutamus" Page 2

4 QoL Schrebergarten story 84yr old man, 43 years he rented and used this garden 3 months ago sharing beer with friends in his garden Sudden diagnosis of cancer of the spine Time Page 3

5 Old? Survey found that one's sentiment toward their desired lifespan increases with age. Survey subjects aged 35 to 39 want to live an average of 74 years, while, the 55 to 59 demography hoped to live to 82. Less than 60 percent of individuals stated that they hoped to continue living with their spouses in their golden years. Page 4

6 (Yet) Another age distribution trend and forecast United Nations Population Fund (UNFPA) Page 5

7 Percentage of over 60's living independently United Nations Population Fund (UNFPA) Page 6

8 Other silver products to iensure the health of an ageing population Dr John Schoonbee, Chief Medical Officer, Swiss Re Europe Geneva Association 2013, Insuring the health of an ageing population

9 Current "State of Play" Inter-relationship between many factors Healthy Life Expectancy Current products Life Expectancy Non multi generational culture Social care Philosophy of Mortality Incidence/ Prevalence Page 8

10 Value beyond measure Australian Government study in 2003 estimated that women between the ages of 65 and 74 years contribute A$16 billion per year in unpaid caregiving and voluntary work. Similarly, men in the same age group contributed A$10 billion per year. Netherlands yr olds 60% woman 40% men... provide care for g'children UK 30% yr old engaged in voluntary work United Nations Population Fund (UNFPA) Page 9

11 Benefits of older ages having good insurance cover Selves State Others having financial risk (other insurers, family, state) Economy Those employed in care sector Family Page 10

12 What do we normally cover? Death (Inability to work) Medical costs Permanent care Severe illness Page 11

13 Issue age In the 2001 Survey, the maximum issue age for any product ranged from 50-90, with the most common maximum issue age being 80. The maximum issue age for any coverage ranged from 70-90, with the most common maximum issue age being 85, in 2006 SOA survey. Page 12

14 So is there a problem? 1. Increasing Need 2. Growing Gap 3. Unsustainable Model Page 13

15 Increasing Need Elderly population % of elderly population Health care costs Social affordability Multi generational families Available carers "carer" to old age ratio Page 14

16 European Insurance Report 2012, Swiss Re 15

17 Main concerns leading to insurance buying European Insurance Report 2012, Swiss Re 16

18 % of riders sold in the US with Life Cover Page 17

19 Current model sustainable? Insurance becomes unaffordable Incidence increase leads to changed model insurance model becomes financial model Ratio of young to old decreasing Older people are generally underwritten out Age Group No of chronic conditions % 18.9% 15.2% 12.6% 12.2% % 21.9% 27.3% 31.2% 31.4% Wolff J et al., Arch Intern Med 2002; 162: Page 18

20 acute event Pathways treatment on-going care death chronic deterioration on-going care death Page 19

21 acute event Pathways Medical/CI treatment LTC on-going care death chronic deterioration on-going care death Page 20

22 Failure to Thrive Basic ADL Advanced ADL Work (AADL) Travel Volunteering Community Involvement Telephone use - Meal preparation Shopping - Housework - Medication use Finances - Driving Instrumental ADL (IADL) (ADL) Feeding - Toileting - Bathing - Transferring - Mobility - Dressing Life Space: How Big Is Your World? 21

23 Social & Productive Activities in the Elderly 2812 elderly followed for 13 years Social - church, cinema, restaurant, trips, cards, games, social groups Productive - gardening, preparing meals, shopping, community work, employment Fitness - walking, physical exercise Social & productive activities lower mortality as much as fitness BMJ 1999, Glass et al.319: Slide 22

24 mortality Social & Productive Activities in the Elderly 2812 elderly followed for 13 years Social - church, cinema, restaurant, trips, cards, games, social groups Productive - gardening, preparing meals, shopping, community work, employment Fitness - walking, physical exercise Social & productive activities lower mortality as much as fitness Low Low- Medium Medium- High High Social Productive Fitness BMJ 1999, Glass et al.319: Slide 23

25 Prevalence of disability in a composite 75 year old population in Spain Virués-Ortega et al. BMC Public Health 2011, 11:176 Page 24

26 PRODUCT 1 "Prevention" Benefit AAL (Ambient Assisted Living) integrated products Increase time of a real "bigger world" Technology and enablers to extend independent living Prevents falls Enable local mobility, community Addendum to current products "wellness for aging" Aiding extension of "independent living" Page 25

27 New aged rollators Veloped Page 26

28 acute event Pathways Medical/CI treatment LTC on-going care death chronic deterioration on-going care death Page 27

29 PRODUCT 2 Recovery / Stopgap Benefit Equivalent of Temporary Disability or Income Protection cover Short term following common/major acute event, where rehab and recovery can make or break return to independent living (Danish study) With monitoring devices, sooner intervention, higher chance of avoiding the "threshold" Page 28

30 "Short term care", or "giving rehabilitation the best chance" Even countries which have generous state benefits for the elderly invariably have a delay before support / home adaption is provided Fits in well in markets which already offer LTC Short term care - Covers the costs of house adaption and other changes which extend independent living and / or covers the first months in full time care, enabling assets to be realised 29

31 acute event Pathways Medical/CI treatment LTC on-going care death chronic deterioration on-going care death Page 30

32 PRODUCT 3 Disability/Care Cover for Life Either disability products have (mandatory) post work benefits priced in to allow for affordable "care" cover for the elderly, or LTC needs to be marketed more actively to the younger insureds Page 31

33 Long term care* accelerator Rider to a whole of life policy Benefit starts on permanent failure of a number of ADLs could also be restricted to start after a certain age e.g. 50 A certain monthly % of whole of life sum insured is paid could be 1% Payment could continue until whole of life sum insured is exhausted i.e. 100 monthly payments (8.3 years) under above example Payment may need to be limit to a % of sum insured e.g. 50% to maintain nature as a rider in some jurisdictions to maintain the original need for the WoL cover in the first place Could be combined with a TPD accelerator (pre-retirement age) 32

34 Disability cover WOL (but converts after retirement) disability cover "Long Term Care" retirement 33

35 PRODUCT 4 - Mobility Travel and driving insurance Allows for slowing down of deterioration Multiple ways to mitigate risks sum assured (for car make/model) ability to underwrite more stringently automatically included in domestic cover Good for industry image, and no need to be non profitable Older age spending increasing... Page 34

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37 Product development is very market dependent Current or existing covers Regulation Philosophy around death Health care cost controls etc... We should think out the box, and focus on Quality of Life Technology use Page 36

38 Thank you

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40 The complete life, the perfect pattern, includes old age as well as youth and maturity. The beauty of the morning and the radiance of noon are good, but it would be a very silly person who drew the curtains and turned on the light in order to shut out the tranquility of the evening. Old age has its pleasures, which, though different, are not less than the pleasures of youth. W. SOMERSET MAUGHAM, The Summing Up Page 39