The Challenges Insurance Companies Face In The Silver Economy

In the past 200 years, the average life expectancy globally has doubled and is now above 70 years old. This rise in life expectancy comes with new challenges for our society, especially for the elder who want and need opportunities to have a better life. For this reason, the Silver Economy proposes new business models and services that we can offer our seniors so that they can have a much more active and better quality of life. Having said this, the insurance industry still struggles with this group of consumers and there are various aspects in which they can improve.




The first challenge is that this generation has very different age groups with different wants and necessities, thus insurance companies have to adapt and personalize each product to different age groups. One solution to tackle this challenge is to associate and partner with different entities that are experts in each niche so that they can bring the best services and solutions for each segment.


The second aspect to take into consideration is that in many insurance companies there are only two moments when the company has contact with the insured. One, when the insured purchases the service, and two when something has occurred to the insured. A really long time can pass between these two events, and sometimes the latter never occurs. This produces distance in the relationship between the insurer and the insured which leads to some sort of distrust and in many cases, the insured will not see the value the service adds to his/her life.


This is where many opportunities can arise, especially by adding an ecosystem of services to seniors where they can feel closer and more connected to the insurance company. It is important to acknowledge that people are not looking for an insurance policy, they are looking to be protected and that is where the real value can come from.


Offering services, like Roble, aimed to build a relationship with the customer where she/he feels full every day by doing different cognitive, social, and physical activities this is where true relationships are formed. Also, by being closer to clients, companies can obtain better data to assess their risk profile and offer even better services to them. Adding on, customers are becoming more open to sharing data and paying more for superior risk prevention services. The capacity of the insurer to offer value-added, individualized, adaptable solutions that strongly emphasize preventive and risk reduction has a big impact on customer loyalty.


One of the last challenges is that there is an increasing demand for customers showing high interest in new insurance models, however, many insurance companies have not yet taken this approach leaving customers unsatisfied. Approximately 58% of customers exhibit a strong interest in innovative insurance models, and insurance companies are only 26% ready to provide these models. As one can see, there is a misalignment here, and one that should be covered definitely. New business models, including intelligent ecosystems, and value-added risk prevention services provide insurers the chance to innovate, generate revenue, and assist consumers at the same time. As stated before, customers are seeking value and they want to feel protected throughout their lifetime, not only when an accident occurs.


Insurance companies need to re-evaluate their conventional responsibilities and adopt an ecosystem approach to seek innovation and provide high-quality value to their customers.

Lastly, there is a fundamental shift in customers' needs and wants and they are in need of new value propositions.


Let’s change the game and let's improve our offerings!


References

Paz de la Fuente, Ó. (n.d.). Seguros, tecnología y disrupción hacia nuevos modelos de protección. calameo.com. Retrieved October 31, 2022, from https://es.calameo.com/community-of-insurance/read/00036593288f4aea9d724

Verboven, H., & Verboven, P. (2021, May). The silver revolution and the assisted living market. Navigating through the perfect storm. Jane. Retrieved October 31, 2022, from https://jane.app/