The reasons for the phenomenon are complex and vary by country. But generally, as life expectancy increases and the number of children people are having declines in many parts of the world, governments are raising retirement ages to help the state and taxpayers bear the costs of ageing populations who will require significant state support.

The outlook is not the same everywhere. For example, in the Asia-Pacific region, the population of over-60s is predicted to triple between 2010 and 2050 to reach close to 1.3 billion.¹ Yet, in Africa – the world’s most youthful continent – more than 70% of people in the sub-Saharan region are aged under 30.²

In many markets, measures to raise the state retirement age are already being phased in, with every country making its own unique calculations as to how it will work.

For example, the legal pension age for Belgians will rise gradually until it reaches 67 by 2030 – but exceptions will be made for those with longer careers to draw their pension much earlier.³

Asking people to work longer before they’re eligible to draw a state pension is not always a popular solution. In France, workers have protested plans to lift the pension age from 62 to 64. The United Kingdom’s pension age is set to rise to 67 between 2026 and 2028. But a thinktank’s recent proposal that UK policymakers hike it further to 71 to bear the cost of supporting a rapidly ageing population sparked controversy – critics have argued that while people may be living longer, many on lower incomes are retiring in poorer health.⁴

Making healthy nutritional and exercise choices can help keep certain types of diseases at bay. But genetic predispositions and environmental factors also influence people’s health. And unfortunately, even taking into account healthy lifestyle changes, the risk of developing cancer, cardiovascular disease and musculoskeletal and neurological issues inevitably increase with age.

So, as the age of retirement rises in many countries, the proportion of employees struggling with health issues while still reliant on cover via workplace health, disability and life insurance plans could conceivably grow. As a result, smart EB programme design must anticipate and respond to growing demand and a potential rise in claims. How do multinationals go about this?

Consider metabolic system diseases such as type 2 diabetes, which are reaching epidemic proportions around the world. The long-term effects of diseases like diabetes can be severely debilitating.

For workers living with chronic ill health stemming from conditions like diabetes, continuing to work later in life than they had anticipated could worsen their physical and mental health and lead to greater risk of absenteeism and higher medical claims costs.

Multinationals will likely need to plan for increased health insurance support for common chronic diseases, like diabetes. But they can also protect against these challenges via their EB programme, by investing in preventative health and wellbeing solutions and comprehensive screening programmes to help their people lower their disease risk.

And it’s worth thinking about musculoskeletal (MSK) conditions too. This is currently the top cost driver in MAXIS claims data and could continue to be a problem as workplace demographics trend older.⁵ Employees who work in physically demanding jobs could face higher MSK disease risk if retirement is postponed. Some studies have raised concern that later retirement ages can put physical labourers, such as construction workers, at higher risk of injury and wear-and-tear.⁶ But desk-based workers who have and will spend the majority of their working life sitting in front of a screen also face MSK and other sedentary related risks.

As our recent report found, many of the industries recording the highest MSK paid claims costs are those in which sedentary, desk-based work is common. Higher proportions of senior workers remaining in the workforce present a risks of absenteeism and of the MSK cost trend ballooning even further, as age related wear-and-tear affects employees.  

Pricing risks will be key too. Age-related disease presents challenges for the insurance industry as it works on pricing demographic changes into plans. The increased risk may well lead to higher insurance premiums for multinationals. Demand for certain products, such as life and disability insurance, are also likely to rise if a higher proportion of a workforce is aged 60+ in the future.

Global EB programmes can help to provide some pricing stability, spreading risk across multiple markets. And of course, with a captive programme, multinationals can take the full risk themselves, writing policies at breakeven or reinvesting underwriting profits back into wellness initiatives.

Getting the pricing right will become an even bigger challenge for captives, and working closely in partnership with a global EB network can help the captive price risks effectively according to their strategy.  

And it’s worth employers considering the terms and conditions of your own insurance policies. An employee could conceivably get stuck with an older, outdated policy with a cut-off age of, say, 65, despite working well beyond that age. You can take action by reviewing local insurance coverage to ensure policies accommodate your workers of all ages in every market.

It’s also useful for multinationals to think about what kinds of benefits and workplace policies will attract and retain more mature talent. We’re likely to see a growing reliance on EB programmes in many markets where retirement age thresholds are rising, as employees wait longer to receive state support, postponing access to income they had expected to help with later life’s costs.

So, what might prove popular?

If people are living longer and state support beginning later, financial wellness will be crucial for employees to retire at the age they want to and enjoy a good quality of life in their golden years. Employer-provided financial wellness services could be very important in helping employees understand how to manage their money better and save for their future. And these services, alongside employer-sponsored pension products, aren’t just important for older workers. Younger employees will also benefit as starting saving early gives pension funds longer to grow.

Then there’s caregiving to think about. Employees working later in life may be ‘sandwich caregivers’ who look after grandchildren, partners or relatives at the same time. The need for caregiving benefits is likely to rise, alongside flexible and remote working policy trends, as a reflection of the many demands on your people’s time outside work.

And as the makeup of the workforce changes, future EB trends may tend to be shaped by the demand for flexible solutions that adapt to the differing health and wellbeing needs of many generations all in the workforce at the same time. Surveys have shown that Generation Z workers tend to value employers offering mental health support,⁷ while older workers closer to retirement are more likely to value quality healthcare coverage and financial benefits.⁸ Are you investing in flexible and varied employee benefits that will meet your workers needs at different phases of life?

_{[1] Anon. Asian Development Bank. Adapting to Ageing Asia and the Pacific https://www.adb.org/what-we-do/topics/social-development/aging-asia (Sourced: May 2024)}

_{[2] Anon. Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States. Young People’s Potential, the Key to Africa’s Sustainable Development https://www.un.org/ohrlls/news/young-people%E2%80%99s-potential-key-africa%E2%80%99s-sustainable-development  (Sourced: May 2024)}

_{[3] Anon. European Commission. Belgium - Old-age pensions and benefits https://ec.europa.eu/social/main.jsp?catId=1102 (Sourced: May 2024)}

_{[4] Hill, A. The Guardian (9 February, 2024) Raising UK state pension age to 71 would bring ‘misery’ to millions https://www.theguardian.com/money/2024/feb/09/raising-uk-state-pension-age (Sourced: May 2024)}

_{[5] Anon. MAXIS GGN (February 2024) How do industry, culture and gender affect employee health? Insights from MAXIS claims data https://maxis-gbn.com/knowledge-centre/whitepapers/how-do-industry,-culture-and-gender-affect-employee-health-insights-from-maxis-claims-data/ (Sourced: May 2024)}

_{[6] Vanajan, A. and Bultmann, U., et al (September 2021) European Journal of Ageing. Do older manual workers benefit in vitality after retirement? Findings from a 3-year follow-up panel study. 18(3) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8377110/ (Sourced: May 2024)}

_{[7] Coe, E. and Doy, A.  McKinsey Health Institute. (April 8, 2023) Gen Z mental health: The impact of tech and social media. https://www.mckinsey.com/mhi/our-insights/gen-z-mental-health-the-impact-of-tech-and-social-media (Sourced: June 2024)}

_{[8] Anon. Employee Benefits Research Institute (January 26, 2023) Which Benefits Are Valued Most Depends on Age of Workers https://www.ebri.org/docs/default-source/fast-facts-(public)/ff-453-wwsage-26jan23.pdf (Sourced: June 2024)}

^{This document has been prepared by MAXIS GBN S.A.S and is for informational purposes only – it does not constitute advice. MAXIS GBN S.A.S has made every effort to ensure that the information contained in this document has been obtained from reliable sources but cannot guarantee accuracy or completeness. The information contained in this document may be subject to change at any time without notice. Any reliance you place on this information is therefore strictly at your own risk.} 

^{The MAXIS Global Benefits Network (“Network”) is a network of locally licensed MAXIS member insurance companies (“Members”) founded by AXA France Vie, Paris, France (“AXA”) and Metropolitan Life Insurance Company, New York, NY (“MLIC”). MAXIS GBN S.A.S, a Private Limited Company with a share capital of €4,650,000, registered with ORIAS under number 16000513, and with its registered office at 313, Terrasses de l’Arche – 92727 Nanterre Cedex, France, is an insurance and reinsurance intermediary that promotes the Network. MAXIS GBN S.A.S is jointly owned by affiliates of AXA and MLIC and does not issue policies or provide insurance; such activities are carried out by the Members. MAXIS GBN S.A.S operates in the UK through its UK establishment with its registered address at 1st Floor, The Monument Building, 11 Monument Street, London EC3R 8AF, Establishment Number BR018216 and in other European countries on a services basis. MAXIS GBN S.A.S operates in the U.S. through MAXIS Insurance Brokerage Services, Inc., with its registered office located in New York, USA, a New York licensed insurance broker. MLIC is the only Member licensed to transact insurance business in New York. The other Members are not licensed or authorised to do business in New York and the policies and contracts they issue have not been approved by the New York Superintendent of Financial Services, are not protected by the New York state guaranty fund, and are not subject to all of the laws of New York. MAR01429/0624}