Capgemini Report: Aging Population to Reshape U.S. P&C Insurance Market by 2050
The Capgemini Research Institute's 2025 World Property and Casualty (P&C) Insurance Report highlights the significant impact of global population aging on the P&C insurance industry by 2050. As the ratio of seniors to working-age adults increases, consumer behavior and economic structures are shifting, influencing insurance demands and risk profiles. By 2050, the global dependency ratio is projected to rise significantly, indicating more seniors per working adult, especially outside of Africa, which remains a younger demographic region.
This demographic transformation alters consumer spending habits, with a notable shift towards lifestyle and experiential expenditures rather than acquiring additional or larger homes. This trend, coupled with urbanization and technological automation, will prompt P&C insurers to adapt their offerings. For instance, auto insurance may evolve towards commercial and shared mobility coverage as seniors reduce personal driving. Similarly, property insurance will need to address preventive measures suitable for smaller, multi-generational housing and commercial lines will adapt to changing workforce risks due to automation.
The report stresses that insurers must analyze and adjust their portfolios to these demographic changes in mature and transitioning markets. Leveraging AI and advanced underwriting techniques will be critical in enhancing customer experience and maintaining competitive positioning in the market. However, currently, only a minority of insurers have mature advanced underwriting capabilities.
Climate-related risks exacerbate challenges for the aging workforce and insurance risk assessment. With most of the global population increasingly exposed to droughts and excessive rainfall, insurers face interconnected risks that heighten potential losses. Incorporating climate risk data and predictive analytics into underwriting is essential for developing effective, resilient strategies.
The report advocates for P&C insurers to adopt a forward-looking approach centered on real-time intelligence, predictive insights, and continuous evolution of business models to address demographic and environmental shifts. Executives are encouraged to implement medium-term actions while boards focus on long-term strategic planning to navigate these complex challenges.