A recent report by the Capgemini Research Institute warns that the life insurance industry faces a major transformation as an estimated $7.8 trillion in assets under management (AUM) is set to be transferred to beneficiaries by 2040. This represents the largest inter-generational wealth transfer in history.
Currently, individuals aged 65 or older own 40% of insurers’ AUM, amounting to $7.8 trillion across the 40 largest global life insurance companies. With the United Nations projecting that 33% of the global population will be over 50 by 2050, the need for effective financial and life insurance planning for aging populations is becoming increasingly urgent.
Barriers to Financial Preparedness
The report reveals that 60% of individuals aged 65 or older have not sought professional financial advice to prepare for retirement or wealth transfer. Key barriers to life insurance adoption include
- Complexity of insurance products
- Limited awareness (39%)
- Lack of trust (29%)
Call for Innovation and Personalisation
Samantha Chow, Global Leader for Life, Annuity, and Benefits Sector at Capgemini, stressed the need for insurers to evolve
Insurers must appeal to the evolving needs of consumers by creating a personalised and tailored experience through more innovative product design.
To meet rising demand, especially from affluent and mass affluent consumers—over 75% of whom are interested in innovative life products—insurers must enhance their product development capabilities. Currently, only 27% of insurers have the advanced capabilities required to serve this market effectively.
Ecosystem Partnerships as a Strategic Solution
The report recommends that insurers form partnerships with organisations specialising in senior services to close capability gaps and offer value-added services. These could include wellness programs, assisted living support, and estate planning tools.Early engagement with both policyholders and their beneficiaries is critical to building trust, simplifying processes, and ensuring smooth asset transfers.
Shifting to a Customer-Centric Model
Insurers are urged to move from a product-centric to a customer-centric approach by offering comprehensive solutions that support aging well. Key actions include
- Improving onboarding experiences
- Increasing policyholder and beneficiary engagement
- Simplifying the claims process
Data and Technology Gaps Remain
Despite the opportunities, the report notes that only a limited number of insurers currently use advanced data analytics and technologies to make informed, real-time decisions. Investing in digital capabilities will be essential for streamlining operations and delivering personalised services.Insurers that successfully adapt will not only build trust across generations but also position themselves for sustainable growth and leadership in managing the historic $7.8 trillion wealth transfer.
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