Capgemini Forecasts Major 2050 Transformation in P&C Insurance from Aging and Climate Risks

A recent report by the Capgemini Research Institute identifies significant transformations ahead for the global property and casualty (P&C) insurance sector by 2050, driven primarily by demographic shifts, evolving consumer behaviors, and mounting climate risks.

The report highlights an increasing global dependency ratio, with seniors per 100 working-age individuals projected to grow from 16 in 2024 to 26 by 2050, or 31 excluding Africa, indicating profound economic and insurance market impacts. Insurance growth is expected with a compound annual growth rate (CAGR) of 4.4% in commercial lines and 3.3% in personal lines, reflecting changes in risk exposures tied to an aging population.

Notably, trends such as decreased driving among seniors and shifts toward shared mobility will prompt insurers to reorient focus, especially within auto and personal property insurance sectors. Climate risks compound these challenges, with Oxford Economics research forecasting widespread vulnerability to drought and excessive rainfall, intensifying potential losses and underscoring a pressing need for enhanced risk management and climate-aware underwriting. While 88% of insurers recognize the requirement for predictive and AI-driven underwriting solutions, only 17% have robust capabilities in place, revealing a gap in technological preparedness.

 Capgemini advises insurers to adopt a strategic framework emphasizing customer-centric age-sensitive services, advanced technology integration including AI and automation, and strong risk governance practices encompassing predictive underwriting and dynamic portfolio oversight. The report stresses the necessity of medium-term operational initiatives combined with long-range leadership focus to future-proof the P&C insurance industry against demographic and environmental shifts.