An ageing population is doubtlessly one of the trends having the greatest impact on Western society, both at a demographic and a socio‑economic level. Portugal and Spain in particular are being affected by an ageing population and research suggests both countries are close to Japan’s average.
Japancurrently has the most aged population in the industrialised world with one infour people predicted to reach 100 over the next 20 years. There are however, anumber of aspects to consider in order to better understand the causes oflongevity and its context – for the insurance sector and the insured.
Firstly, dowe live longer because we are now fitter or because our health has improvedsignificantly? These factors are certainly contributors. On the one hand, we’remore aware of health and well -being; and this is something that will continueto grow. On the other hand, there’s a growth in the number of people withdiseases, mainly chronic ones, being cared for by the public and privatehealthcare systems. Our bodies are similar to machines; the greater theinvestment in maintenance, the longer the lifespan. In short, we will be ableto live longer if we maintain fitness levels and care for our bodies.
In thiscontext, we should be mindful we’re ageing in an ever -changing and complexenvironment. Medical, technical and pharmacological treatments are progressingrapidly and increasing life expectancy. Such developments however, result inhigher costs for health service providers, and the impact of spiralling medicalinflation creates greater sector uncertainty and concerns for the sustainabilityof the current business model.
Technologyis similarly changing the traditional relationship with the insured. E -Healthor Digital Health embraces a wide range of new concepts and tools, redefiningthe parameters of healthcare provision, and, quite probably, the business modelas well. Identifying what developments will have the biggest impact –mainly forthe eldest of the population pyramid– poses one of the biggest challenges andinvestment risks for the sector. Upon reflection, rather than wait to see whathappens and then react, would it not be better to disrupt the traditionalbusiness model?
As I seeit, the position our sector currently adopts regarding the ageing issue isstill defensive; waiting and gradually adapting to changes in order to avoidlittle -known future outcomes. The reality is, as the policyholder ages andcost of healthcare service increases, it impacts on the premium cost. In orderto continue to be able to afford health insurance cover, policyholders turn tocheaper insurance that offers more limited benefits. This dilemma illustratesthe clear imbalance between the value we add as a sector and how we meet theneeds and expectations of this part of our population. Our solutions do notseem to be completely satisfactory for our eldest policyholders.
In light ofthese factors, we should focus on changing some of the widely -acceptedbusiness practices, particularly for this ageing segment of our population.Policyholders are ever more independent in their decision- -making, they’rebetter informed and, above all, more aware of their health. The insured, or patients, want to getactively involved in the decision -making process, they want to be offered–through new technologies– access to doctors’ contact information and they wantto be supported with self -care and have their specific age -related needs met.
Preventionis also a key to successfully manage the risks associated with ageing. Forevery Euro invested in prevention, the public health system estimates it willsave around 25€ (Dr Carles Blay, at the 10th insurance leaders meeting, Barcelona:ESADE / Medical School, UVIC, 2 October 2018). A continuous medical follow -upfor elderly patients is a vital component of prevention so it would be advisableto strengthen the role of the general practitioner to that of a ‘managingdoctor’.
Ourtraditional approach to insuring elderly people fails to appreciate theiroverall well -being or social influences. Such is our focus on treating aphysical problem, we fail to consider their emotional well -being. A doctor,for example, may focus on treating high cholesterol, but not pay attention tothat patient’s environmental or social influences. Emotional well -being iscrucial for everyone, particularly ageing people. By having a generalpractitioner as a ‘managing doctor’, it would result in a closer patient orinsured relationship, a greater focus on prevention and fewer physical issues.We currently have the tools and the technology to do this; it’s basically howwe approach it.
Inaddition, public and private healthcare providers must work more closelytogether. This ageing phenomenon challenges both health systems and society asa whole. It is therefore vital to collaborate more, particularly as the privatesector will need to provide cover and services after people retire.
The ageingtrend in Portugal and Spain is unrelenting and although the traditional conceptof health insurance is facing important challenges, medical advances andtechnological developments –along with a greater emphasis on prevention andwell- -being– will open new windows of opportunity. Furthermore, a highpercentage of our elderly population holds considerable purchasing power – this should encourage all sector agents toadapt their offer to meet their needs.
Looking atour current policies, we could extend them with new service concepts (maybefranchisees), focus more on emotional and well -being care or introduce the‘managing doctor’. Such elements would add value to the core proposition forthis section of the population. And last but not least, it will improve ourrelationship with the elderly so it becomes less transactional and more humane.
Josef Brem
Holds degrees in English Literature andBusiness Science from Regensburg University, Germany. He has worked for Munich Re for already 33years, both in London, Munich and Madrid in various functions. Starting as aCasualty Underwriter for the London Market, he headed the Casualty Underwritingin Madrid for more than 12 years. For another 7 years he headed the CapitalManagement Unit in Madrid and for the last 6 years he is Director of the Centreof Competence Health for Spain, Portugal and Latin America in Madrid.
