Life insurance industry faces unprecedented challenges with $7.8 trillion wealth transfer

Insurance
26/12/2023 Article

The life insurance industry is on the brink of a seismic shift as it grapples with the impending transfer of $7.8 trillion in assets to beneficiaries by 2040, according to the Capgemini Research Institute's World Life Insurance Report 2023. Currently, policyholders aged 65 or older own a substantial 40% of insurers' assets under management (AUM), and this wealth is poised to change hands within the next two decades.

Alarming findings reveal that 60% of individuals aged 65 and above have not sought professional financial advice for retirement or wealth transfer. With the United Nations predicting that 33% of the global population will be over 50 by 2050, the lack of financial planning among senior citizens becomes a critical concern.

As economic challenges, dwindling government support, and rising healthcare costs compound the cost-of-living crisis, individuals approaching retirement bear more financial responsibility for aging well. Despite the growing need for life insurance, consumers face barriers such as complexity in offerings (39%), limited awareness (29%), and a lack of trust (29%).

To address these challenges, the report recommends that life insurers prioritize affluent and mass affluent consumers, who hold 39% of global wealth and constitute 20% of the aging population. This demographic desires innovative life products, with over 75% expressing interest. However, only 27% of insurers possess the advanced product development capabilities needed to cater to this market.

Ecosystem partnerships are identified as a crucial strategy for insurers to bridge the gap in providing value-added services. By collaborating with firms specializing in serving seniors, insurers can create a personalized and tailored experience for policyholders.

The report emphasizes the need for insurers to transform their customer lifecycle approach, shifting from a product-centric model to one centered on customer needs. This transformation involves consolidating customer data for a comprehensive view, leveraging artificial intelligence for personalized advice, and modernizing technology to streamline operations.

Insurers are urged to simplify and personalize onboarding journeys, enhance claims experiences, and capture a single view of the customer. By successfully navigating this journey, insurers can fortify trust across generations, foster future growth, and safeguard the substantial assets at risk of transfer in the coming years.

In essence, the life insurance industry faces a critical juncture, requiring innovation, collaboration, and a customer-centric focus to navigate the challenges posed by the unprecedented wealth transfer on the horizon.

Download your free copy

Related news & insights

Insurance
10/02/2025 Interview

At work with Christine Theodorovics

Christine Theodorovics became the CEO of Baloise Luxembourg in 2023, the latest step in a successful international career in financial...

Insurance
06/02/2025 News

Aon, Floodbase, and Swiss Re launch parametric solution to strengthen U.S. hurricane insurance coverage

This innovative product is designed to fill the protection gaps often left by traditional insurance policies, which may include high...

Digital Reinvention
06/02/2025 News

Amdax launches Novelist to simplify crypto investing for retail investors

With a minimum investment of just €500, Novelist aims to lower the barrier to entry for individuals looking to invest...

Insurance
06/02/2025 News

Lippo General Insurance launches MyGo+ to promote safer driving in Indonesia

Using real-time driving data, the app analyzes driving behavior and provides a reward system to motivate responsible driving. This initiative...

Digital Reinvention
03/02/2025 News

BPCE becomes first French bank to offer online subscription for individual retirement plans

Banques Populaires and Caisses d’Epargne, part of the BPCE Group, have become the first banks in France to offer online...

Mobility
03/02/2025 News

Roadzen integrates DeepSeek R1 into MixtapeAI, advancing AI for insurance and mobility

This move enhances MixtapeAI’s capabilities with advanced reasoning and ensures strict data sovereignty, reinforcing Roadzen’s commitment to secure, intelligent automation.

Mobility
03/02/2025 News

Tesla introduces exclusive insurance discounts for self-driving users

This marks the first time Tesla has offered such a discount, highlighting the company’s confidence in the safety of its...

Digital Reinvention
29/01/2025 Interview

Why banks can't ignore cryptocurrencies

Ernesto Fasola, author of a recently published book on cryptocurrencies, has over 30 years of experience in banking and finance....