Challenges presented by demographic change
Current demographic trends are bound to have a perceptible impact on our society. Particularly in industrialised countries, people are tending to live longer on average, while birth rates are declining. These » demographic trends call for new thinking and new solutions from the insurance industry as well. Munich Re is applying its extensive knowledge to counter the changes in our society's age structure and its consequences regarding, for example, pensions and healthcare management, with models tailored to our different fields of business.
As a global group, Munich Re carefully monitors the special needs of individual markets and the changes to be expected in their age structures. In the industrial nations, for instance, the costs of pension insurance and healthcare are continuing to spiral upward. What's worse, the number of people without health insurance is rising continually. However, the trend toward increasing life expectancy is also evident in many emerging countries – as is also the necessity of providing minimal healthcare to the population at large – for example in China. These changes are expected to progress significantly faster in these densely populated regions than in Europe.
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Images of change
In less than fifty years' time, people in their seventies will be the largest population group in Germany. This is attributable to a variety of causes, among them our rising life expectancy and stagnant birth rate. Ageing also causes the pyramidal age structure typical of earlier eras to change into a sharply pointed onion- or urn-shaped distribution – characteristic of many industrial nations.
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Making pension models sustainable
This will result in dramatic cuts particularly in old-age pensions. People will increasingly have to finance not only a state pension, but also a private one in order to maintain their standard of living over the long term. Regardless of whether life policies or other sustainable models are needed, ERGO is a strong, reliable partner that offers its clients a broad spectrum of flexible pension products.
New tasks for the insurance industry
One of Munich Re’s main core-business challenges is reinsuring the risks of its primary insurer clients. This is particularly true of the health insurance segment.
The incidence of diseases of affluence such as obesity, late-onset diabetes, cancer and cardiovascular diseases is increasing rapidly, and the costs of treating them are rising immeasurably. This trend is attributable to altered living and eating habits. The problem is global in that this trend recurs in many countries as they develop materially and grow in prosperity. Munich Re is combining its knowledge in the relevant fields to counter this trend. Munich Health offers preventive measures and a range of private covers and medical care options tailored to the growing demand for individual, integrated insurance services.
“Munich Health brings together a unique spectrum of service providers and risk carriers under one roof. These extend from pure reinsurers and traditional primary insurers to full-range providers of integrated insurance and healthcare services", says Dr. Wolfgang Strassl, the member of Munich Re's Board of Management responsible for the Munich Health field of business.
Visionary human resources policy
Current demographic trends pose a challenge even for a global company such as Munich Re. In the coming years, there will be fewer well-trained young college and university graduates. To counteract this problem, we are already offering specific, individualised further training and career planning within the Group to ensure that our staff can develop optimally. Here, special attention is being given to the issue of diversity, i.e. the conviction that one objective of successful human resources work is to have a workforce characterised by a wide variety of social backgrounds and broad experience. The Group-wide introduction of a diversity strategy in 2011 also underscores our intention to be prepared for these developments. In this context, public events such as the Munich Re Foundation's forums also make a contribution. For example, the series on "Demography and migration" dedicated its initial discussion in January 2011 to the impending dearth of specialist staff. "We are getting older and scarcer – and that is quite alright!" was the provocative title of the discussion evening, which highlighted prospects for the future resulting, for instance, from an improved range of offerings for integration and further training.
