Managing people risk is one of the most pressing concerns for companies of all sizes across Europe. The environment is dynamic. As companies look to find ways to support the wellbeing of employees, accident and health (A&H) insurance coverage is becoming a must-have benefit.

A&H coverage – which can include private medical, group personal accident and business travel protection, among others – complements the state-backed healthcare systems of countries across Europe, which are coming under increasing strain.

The Covid-19 pandemic threw into sharp relief the pressure on many state-backed healthcare systems across Europe. We have seen a shift in mindset too, with many more governments, individuals and employers recognising the importance of A&H insurance to fill gaps and bolster state provision.

In addition, as pressures on state health insurance systems continue to mount, partly due to the challenges posed by an ageing European population, insurers are exploring ways to collaborate with clients to provide solutions to their new insurance needs. They are increasingly leveraging technology and data to develop relevant complementary insurance products that help protect their clients and employees.

Japan is further ahead in the demographic transition, having been faced for many years with the challenge of an ageing population and a declining birth rate. This environment has provided valuable lessons to insurers operating there. For example, there is a growing imbalance between supply and demand for nursing care: as the customer base continues to grow as the population ages, so too does the financial squeeze on social services budgets, all while the relative size of the labour force to provide the care shrinks.

The wider Sompo group has been providing care for older people in Japan for several decades and has recently been taking steps to use digital technology innovations and data to help boost the sustainability of the country’s nursing care system. These lessons and others from Sompo’s work in Japan will become increasingly applicable further afield as the makeup of other populations follows the same trajectory. An ageing population is one consistent trend in the background of a complex and unpredictable global risk landscape.

This evolving environment gives rise to emerging trends and new needs that A&H insurance is well positioned to address. Geopolitical instability, with its associated risks of conflict and displacement, heightens the need for comprehensive insurance solutions to protect individuals and businesses against unforeseen events. Similarly, the impacts of climate change, including natural disasters and health crises, necessitate robust coverage options.

Ageing population challenges

The International Monetary Fund predicts that global life expectancy will continue its upwards trajectory in the medium term, presenting countries around the world with a host of health-related challenges.
Not only are people living longer, but many countries around the world are also seeing a shift in average age, with birth rates slowing, meaning that a greater proportion of the population is aged 65 or older.

There is an increased focus on preventative care – for example, promotion of healthy lifestyles – and an increased use of technology to provide healthcare via telemedicine and to improve the efficiency of care delivery

According to the World Health Organization, all countries will face pressure on their health and social care systems as populations age. A&H insurance coverage is therefore likely to become an increasingly necessary and valued tool across Europe and the wider world.

On 1 January 2023, more than one-fifth of the population of the European Union (EU) was aged 65 or above and the share of the population that was aged above 65 was increasing in every EU member state. The median age increased in almost every country in Europe between 2013 and 2023, according to EU statistics, and increased by four years or more in Greece, Italy, Portugal, Slovakia and Spain.

The share of the European population aged 80 or older is also on the rise and by 2100 is projected to increase two-and-a-half-fold to 15.3%. Meanwhile, the proportion of the population that is of working age – and therefore paying taxes that fund state-run healthcare systems – is projected to continue to decline.

National healthcare systems are already grappling with the effects of this demographic shift and the situation looks likely to become more acute in the near future. As people age, they are likely to experience several health issues at the same time, some of which may be complex age-related conditions that can affect the heart, brain and immune system, among other things. They are also more likely to require hospitalisation and/or ongoing medical attention for chronic conditions.

Sompo has a lengthy track record of providing A&H coverage in Japan, the country with the largest elderly population in the world. According to Japan’s National Institute of Population and Social Security Research, 29.1% of Japan’s population is aged 65 or over. And those aged 65 or above are expected to account for some 34.8% of the population by 2040.

Insurers and authorities in Japan have responded to this challenge in various ways to fill the gaps created by the squeeze on the state system. There is an increased focus on preventative care – for example, promotion of healthy lifestyles – and an increased use of technology to provide healthcare via telemedicine and to improve the efficiency of care delivery.

What we are learning from our work in Japan, as well as our wider A&H expertise, equips us to respond to clients’ needs, as European populations experience the same pressure on national healthcare systems caused by demographic shifts here as they have in Japan.

Lessons learned from our Japanese operations

One of the challenges that has become increasingly apparent in Japan, particularly over the past decade, has been the need to attract and retain talented personnel to work in the older care home system. To help address this, in 2017, Sompo set up an in-house Sompo Care University to provide employee training – and retraining – for caregivers.

As populations age, dementia becomes increasingly prevalent. In 2018, Sompo launched a Dementia   Support Program with the aim of helping society more widely prepare for this and to enable people with the condition to live happy lives. This forms part of our goal to support active senior citizens and contribute towards a society in which older people can live healthier and more fulfilling later lives, while limiting where possible the burden on social security costs.

Not only are people living longer, but many countries around the world are also seeing a shift in average age, with birth rates slowing, meaning that a greater proportion of the population is aged 65 or older

This programme involves extending care beyond those already using the system to older people not currently receiving care, with the aim of preventing, or delaying, that need arising.

We hope to prompt changes in the mindset and behaviour of some older people to enable them to continue to live well in the wider community.
This includes, for example, working with local governments to set up training courses to address the digital divide and providing support services for at-home caregivers offering training and guidance.

Sompo has also been working to put in place cognitive decline prevention services, which include exercise plans, social participation programmes, nutrition guidance and cognitive function training, for example.

Going forward in partnership

Looking specifically at employee benefits, at Sompo we recognise that, in an increasingly complex risk environment, managing people risk is an important priority for companies across Europe.

It is our goal to work in partnership with clients to understand their emerging needs and to provide the services that go above and beyond an insurance policy to ensure that A&H coverage is relevant for today’s rapidly changing environment.

In parallel, the duty of care that employers have to their employees gains even greater importance. Ensuring the wellbeing and peace of mind of employees, particularly those who travel or work abroad, is becoming a critical aspect of modern workforce management. Employers are recognising that comprehensive A&H coverage not only supports employee health and safety but also enhances overall job satisfaction and retention.