Asia is vastly underprepared for a looming aging crisis, according to a survey from Swiss Re, the world’s second-largest reinsurer.
90 percent of consumers believe they lack the financial resources to fund their future care needs, the firm said in a report on Tuesday, after surveying more than 6,000 consumers across China, Hong Kong, Taiwan, Japan, South Korea, and Singapore. The people interviewed ranged between 20 and 80 years of age.
“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, Swiss Re Asia’s head of life and health insurance.
Moreover, consumers surveyed expect an average shortfall of 50-60 percent in terms of what they will be able to pay and their perception of what the total costs will be, the report found.
The number of elderly in Asia is expected to nearly double by 2030, from 288 million to 572 million, according to Swiss Re’s estimates, which would result in significant socio-economic changes, including smaller household sizes, a widening of age gap between urban and rural areas and a shrinking demographic dividend for gross domestic product.
The region is already home to three countries that rank among the world’s top ten longest life expectancies at birth: Japan, Singapore and Hong Kong.
Why the lack of preparedness? Among the many reasons, a lack of knowledge about how to start planning as well as procrastination and late decision making ranked high among respondents.
“Future care needs are typically considered of lower priority than other life events such as buying a house or some retirement requirements like pensions,” the report said.
Interestingly, future planning isn’t necessarily strongly influenced by income levels, with the report indicating that respondents with higher household income generally only “slightly more prepared” than low-income households.
This presents a unique opportunity for insurance companies, especially as “most consumers are not confident of their government’s ability to fund future care needs,” Swiss Re noted.
“The region’s insurance industry is a late comer in terms of supporting people’s future care needs. The availability of conventional long-term care insurance (LTC) is limited, with a small market observed, mainly in Japan.”
In particular, Swiss Re recommends insurers to develop product offerings that focus on early intervention rather than advanced-stage care in order to ensure better health outcomes.