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Aging population : life insurers will have a lot to do to compete with investment firms

by

Hubert Roy

December 19, 2018 10:15

Photo : Pixabay

The countries where the State plays a strong role in the health system will be a prime target for life insurance companies over the next five to ten years. This is what is stated by the think-tank McKinsey & Company in its report, Life Insurers and Annuities State of the Industry in 2018 : the growth imperative.

The revenue for the market of private health insurance is expected to double by 2025, predicts McKinsey. They are of 1 500 billion dollars at the present time.

The demand will increase given the aging of the population, but also of the increasing prevalence of chronic diseases, says McKinsey. “At the same time, the pressures on the public finances are prompting many governments to cut their expenditure on health. Or to ask players from the private sector to act as intermediaries to manage the expenses and incomes.

Limited prospects in Canada

The analysts of McKinsey sees opportunities for life insurers in Canada, defining it as a market of convenience. They point out that the Canada pension Plan offers limited benefits. However, a high percentage of the canadian population has a pension fund in which a company pays a direct contribution.

The problem is that investment companies are well established in this market. This is particularly true for pension funds. In sum, the life insurance industry has a penetration less high in terms of gross domestic product (GDP), making its growth prospects more risky, judge of the consulting firm.

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