Swiss Re Institute’s new study forecasts global life savings premium to grow to USD 4 trillion by 2033

Highlights:

  • Swiss Re Institute has released A retirement lifeline: Capturing the insurance opportunity in the private savings market, a publication that highlights the opportunity for life insurers to become a lifeline for global retirement preparedness.
  • The retirement savings gap is projected to reach a combined USD 483 trillion across the world’s biggest markets by 2050, up from USD 106 trillion in 2022.
  • Life savings premiums is estimated to grow to USD 4.0 trillion globally in 2033, from approximately USD 2.3 trillion in 2022 as the responsibility for retirement saving shifts from pension systems to individuals.
  • Reinsurance can support the life sector to optimise in-force portfolios and write new products. It enhances their underwriting capacity and helps them focus on product innovation for capital[1]light growth. The report identifies six possible reinsurance structures that can stabilise balance sheets, reduce earnings volatility, and increase capital efficiency.

Global retirement savings gap to increase to USD 483 trillion by 2050

  • Responsibility for retirement savings is shifting rapidly to individuals as longer life expectancies and thus time spent in retirement challenge the funding of pension systems.
  • Swiss Re Institute estimates that the retirement savings gap, combining government, employer, and individual pension savings, is estimated at USD 106 trillion for eight major economies (Australia, Canada, China, India, Japan, the Netherlands, UK, and the US) in 2022. This figure represents 270% of the combined Gross Domestic Product (GDP) of these countries.
  • This gap is growing fast: it is expected to reach USD 483 trillion by 2050, amounting to approximately USD 450,000 per capita in the UK and the US, based on current demographic trends, saving rates, retirement laws, and expected income growth.
  • In advanced markets like Japan and the US, the gap is expected to grow annually by 2.5% and 4.7%, respectively. This expansion is faster in emerging markets such as China and India, at 7% and 10% annually, due to rapid population ageing, the growing middle class and their expected retirement income, and large informal sectors (particularly in India).

Strong forecasted growth in life savings premiums indicates opportunity for life insurers to become a lifeline for global retirement preparedness

  • Strong growth in the life savings market is expected as a growing global middle-class adopts retirement planning and incomes rise in emerging markets.
  • Life savings premium growth is expected to be much higher in the next decade than over the last 20 years.
    • The life savings market is anticipated to expand with a predicted growth from USD 2.3 trillion in savings premiums (2022) to USD 4.0 trillion by 2033.
    • This reflects a 2.7% average annual growth rate.
  • The current higher interest rate environment is likely to enhance life insurance profitability, allowing the sector to finally meet its cost of capital again counteracting more than a decade of losses.

Reinsurance can help life businesses harness the opportunities by optimising their in-force portfolio, developing new savings product, and increasing their agility to grow competitively

  • Reinsurance can be used as a strategic tool to help life insurers harness the opportunities from expected increase in life savings premium growth by freeing up insurers’ capital, boosting their underwriting capacity, helping them focus on product innovation, and reducing stresses introduced by higher interest rates etc.
  • The report highlights six reinsurance structures that can be tailored to insurers’ specific needs, focusing on three areas:
    • Asset-liability management (ALM)
    • Capital and liquidity management
    • Underwriting risks and opportunities
  • These reinsurance structures can help insurers stabilise their balance sheet, reduce earnings volatility, and increase capital efficiency. In doing so, this also offers life insurers the agility to anticipate consumers’ needs and tap into new opportunities in the retirement saving market.

Spokesperson Quote:

Jonathan Graham, Head of Financial Markets & Inforce Management, L&H RI, Swiss Re:

“The growing private retirement savings market can represent a 65% increase in new business premiums compared to the past two decades. As reinsurers, our goal is to help our clients seize this opportunity and help narrow the retirement savings gap. This can be done in many ways, for instance, by co-developing competitive index-linked products, which are relevant for the accumulation and decumulation phases, or by leveraging our structured solutions capabilities to optimise our clients’ in[1]force portfolios while stabilising their balance sheets, reducing earnings volatility and increasing their capital efficiency.”

For more information, please refer to the full report. LINK

Shopping Cart

Media Kit

    Data Protection

    Personal Data (“Data”) submitted for Media Kit (“Media Kit”), and/or collected in the form of first name, last name, email address and other contact details may be used for the purposes of inviting you to future events and for reaching out to you with content which may be of interest to you. For these purposes, The Digital Banker will share the Data with our associate companies (including event and content sponsors) to promote their products and services. You will also be automatically subscribed as a user on www.thedigitalbanker.com. If you would like to opt-out, email us at [email protected].

    By clicking Submit, you acknowledge that you consent/ have sufficient informed consent to the collection, use and disclosure of Data as set out above.

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

        Data Protection

        The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

        Registration Form

          Data Protection

          The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

          Registration Form

            Data Protection

            The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

            Registration Form

              Data Protection

              The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

              Registration Form

                Data Protection

                The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                Registration Form

                  Data Protection

                  The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                  The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

                  COVID-19
                  Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

                  Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

                  The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

                  Request Nomination Pack

                  Error: Contact form not found.