Life insurers face pressure as retirement savings shift

A report from the Swiss Re Institute indicates that life insurers are facing increased pressure as retirement planning shifts toward individual decision-making. Changes in pension systems are prompting people to manage their own retirement income, inheritance, and long-term care rather than relying on guaranteed lifetime payments.

This shift is altering product distribution, with banks and financial advisers playing a larger role in reaching customers. In the United States, three private equity-backed insurance intermediary groups completed over 300 acquisitions of marketing and advisory groups between 2017 and 2025. Data from one major US pension plan showed that more than half of retirees chose to manage funds independently in 2018, up from 10% in 2000. In the United Kingdom, 36% of pension assets accessed by retirees in 2024 were withdrawn as cash instead of being converted into lifelong income.

To adapt, insurers are focusing on reaching customers in the years leading up to retirement and are investing in artificial intelligence and digital services to enhance distribution and customer support.