"As life expectancy continues to rise globally, Reinsurance Group of America CEO Tony Cheng told Fortune that the growing risk of individuals outliving their savings will eventually force a slow but necessary reckoning across governments, insurers, and consumers. While Cheng remains optimistic that longevity is a net positive for humanity, he warns that bridging the so-called "longevity insurance gap" will require deeper financial literacy and broader structural shifts."
"According to data from research bodies the Peterson Center on Healthcare and KFF, life expectancy in the U.S. has moved significantly upwards-with a drop during the COVID pandemic-over the past 30 years. In 1990, for example, the average American lived to 75 years old. By 2022 that had tracked up to 78, and nearly 79 prior to the COVID outbreak."
Global life expectancy continues to rise, creating a growing risk that individuals will outlive retirement savings and other financial resources. Reinsurance providers face both mortality risk and longevity risk when lifespans extend beyond expectations. Rising average lifespans in the U.S. and G7 countries have moved noticeably higher over recent decades, with U.S. averages increasing from about 75 in 1990 to around 78 by 2022. Extended lifespans could alter insurers' cash flows and consumer demand if people feel more confident about future health and reduce insurance purchases. Closing the longevity insurance gap will require broader financial literacy and systemic policy and industry changes.
Read at Fortune
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