Meager retirement savings and the still-lingering effects of a recent recession have kept thousands of older employees in the workforce the world over—a trend that is here to stay, says
Allianz Senior Economist Dr. Michaela Grimm. Already, one in three workers is past the age of 50.
“It’s wishful thinking to assume that once the baby boomers retire, we will be able to go back to the formal normal,” Grimm told
Insurance Business America. “In the long run, one in three people will be working over the age of 50. Companies will have to adjust—at the moment, they don’t feel it because only about 55% of these workers are on the level market.”
When the weight of the trend does start to make itself known, however, it is sure to reverberate across several insurance lines.
“There are several implications,” said Dr. Steven Weisbart, chief economist with the Insurance Information Institute. Weisbart noted in an earlier conversation that auto insurance, workers compensation and health insurance are likely the biggest concerns for both aging workers, the companies that employ them and their own insurance agents.
“At least some of these older people will continue driving to work at times when traffic is at its peak…and to the degree that their age is associated with reduced reaction time or other limitations, that would cause them to have more accidents,” he said.
This may impact auto insurance rates for older workers, who are already struggling to make ends meet. It is also concerning for business sectors that deploy older drivers, such as trucking or utilities services.
Businesses with older workers will also have to think of cost-saving measures in terms of workers’ compensation, Weisbart said.
“The data is pretty clear that people who are over 65 tend to have more injuries and illnesses, and when they do get sick, they tend to stay out longer than younger people,” he said. “This would cause workers comp claims to rise.”
Grimm noted that while all industries are likely to feel the strain in coming years, nursing, manufacturing and accounting are especially poised to see a talent gap emerge.
Aside from assessing appropriate insurance coverage to address these gaps, producers may also find themselves as acting risk manager and advisor for their clients. In that case, it pays to start thinking strategically rather than just defensively, says Scott Steinmetz, Assistant Vice President of Risk Services and Solutions at Fireman’s Fund.
“I think that while this has traditionally been viewed from a tactical standpoint, we’re suggesting that it deserves a more thoughtful and strategic approach,” Steinmetz said. “C-level offices in organizations are going to need to be quite organized, and one of the keys in this transition is recognizing it’s not just about economic reconfiguration to adapt to people’s situations as physical and mental faculties slowly degrade.
"At the end of the day, what we really do need to think about is how to transfer the knowledge, the experience and the qualifications of this aging population to help those who are young in their careers to have a faster uptake in production in their profession, using the value coming from the aging population.”
