Swiss Re Asia Study: Rising need to close elderly care gap

Swiss Re's new report, entitled Spotlight on care solutions in Asia 2015, underlines the challenges of providing long-term care for the ageing population in Asia.

The study covers almost 6 300 consumers across six markets (China, Hong Kong, Japan, Korea, Taiwan and Singapore) identified the following:  

  • Although the need for aged care is well recognised by most people in the region, many are not adequately prepared for future aged care needs for themselves or their families.
  • This is driven by a combination of waiting until it’s too late to plan and a lack of knowledge about where to start when it comes to planning for care.
  • Worryingly, despite the fact that the vast majority of those surveyed do not believe they can rely on their government to provide services, only around 10% think they have the financial resources to fund their future care needs.

The report also pointed out that an additional 15 million people in Asia will reach 65 years old each year in the next 10 years, thus putting an incredible strain on the region’s care resources.

“This report puts into sharp focus the fact that the growing ageing population and the low priority placed on aged care planning are issues that need to be addressed,” said Robert Burr, Head of Life & Health in Swiss Re Asia.

“It is important that all stakeholders, including the insurance industry, work together to tackle these issues and ensure that insurance products for the provision of care are accessible and in line with consumer needs,” he added.

Further, the report noted that the funding gap, or the difference between available financial resources and what people expect the costs of their future care services will be, ranges from 50% to 60% of care costs.

The report has a number of key recommendations for supporting consumers to better prepare for their care needs later in life:

  1. Help consumers start planning: The report found that many consumers are not aware of how they should plan for adequate future aged care. This points to a need for better consumer education on the available options and how best to access these options. The situation presents an opportunity for insurance companies to help bridge this knowledge gap.
  2. A holistic approach preventing procrastination: Aged care planning is often seen as a lower priority, especially by younger age groups. The report recommends the inclusion of care services for the old age in the wider financial and psychological planning for future needs, alongside that for retirement and potential medical costs.
  3. Peace of mind is key: The report found that across all six markets the primary drivers for purchasing insurance was to ensure peace of mind and to reduce the financial burden on their families. Insurers should be mindful of these in the sale and marketing of care solutions.

In conclusion, the report points out that the insurance industry in Asia is a latecomer when it comes to providing care services. The report also notes, however, that there is a consumer need and a significant commercial opportunity to introduce products that incorporate a strong value proposition along the care continuum.

Current products are limited as they focus on advanced stages of care and may not be sufficient to meet the needs of Asian consumers. Insurers will need to look at the different phases of care requirements and offer solutions tailored to consumer preferences on coverage, durations and value-added services. Ultimately, insurers need to collaborate with governments and other stakeholders to help fund care and deliver those services.

The Spotlight on care solution in Asia research survey and report focuses on six key markets: China, Hong Kong, Japan, Singapore, South Korea and Taiwan. The survey covers almost 6,300 respondents between ages of 20-80. Consideration has been given throughout the survey process to balance male and female respondents across the full sample. At the same time, all markets are sampled to deliver reasonable distribution across age, gender and other demographic variables.

Published 10 November 2015

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