"Population trends in Europe and their impact on the retail insurance business"

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1 "Population trends in Europe and their impact on the retail insurance business" Rainer Muenz Erste Group, Vienna European Congress of Mutual & Cooperative Insurance Rainer Münz June 18, 2008

2 Population Today 2 Rainer Muenz

3 European Union + Assoc. Countries EU27+4 EU27 Total Population: 497 million - EU15 ( old MS) 395 million - EU12 ( new MS) 102 million Other EEA+CH 12 million EU27+4 Foreign-born population 509 million 43 million - Foreign-born (in%) 8.5% 3 Rainer Muenz

4 Common Trends and regional differences 4 Rainer Muenz

5 The European case Common trends Low number of children High and growing life expectancy Demographic aging High immigration 5 Rainer Muenz

6 Number of Children in Europe Lowest number of children per family ever recorded in history Below replacement levels Development leads to excess of deaths over births xxx Shrinking native populations 6 Rainer Muenz

7 Number of Children in Europe Children per woman, Rainer Muenz

8 The European case Common trends Low number of children High and growing life expectancy Demographic aging High immigration 8 Rainer Muenz

9 Life expectancy in Europe Highest life expectancy ever recorded in history Constant growth since the mid-19th century No signs of slow down in Western Europe High potential for catch-up in Central and Eastern Europe 9 Rainer Muenz

10 Life expectancy at birth in Europe, 2004, males Rainer Münz June 18, 2008

11 Life expectancy at birth in Europe, 2004, females Rainer Münz June 18, 2008

12 The European case Common trends Low number of children High and growing life expectancy Demographic aging High immigration 12 Rainer Muenz

13 Demographic Aging Not a biological process But a shift from the younger to the older age groups Low number of children Increasing life expectancy Both contribute to population aging in Europe 13 Rainer Muenz

14 EU 27: Aging in Europe M e d ia n A g e A v e r a g e A g e Source: Eurostat; EU Comm Rainer Muenz

15 EU 27: Aging in Europe M e d ia n A g e A v e r a g e A g e Source: Eurostat; EU Comm Rainer Muenz

16 EU 27: Aging in Europe M e d ia n A g e A v e r a g e A g e Source: Eurostat; EU Comm Rainer Muenz

17 The European case Common trends Low fertility High and growing life expectancy Demographic ageing High immigration 17 Rainer Muenz

18 Immigration Foreign-born population in EU27: 43 million Of them: 14 million from other EU countries 27 million from third countries Immigration from other Europe, MENA, sub-saharan Africa, Lat. America, South Asia 18 Rainer Muenz

19 Net-Migration in Europe, (per 1000 inhabitants) over to -2-2 to 0 0 to to +5 over Rainer Muenz Quelle: UN Population Division 2000; Darstellung: Humboldt-Universität Berlin

20 Stock of Migrants in Europe, 2005 (in % of total population) over 15%. 10 to 15% 5 to 10% 0 to 5% 20 Rainer Muenz Quelle: UN Population Division 2000; Darstellung: Humboldt-Universität Berlin

21 Population Change in Rainer Muenz

22 Europe in 2007 Western and Central Europe (EU27/EEA/CH) in 2007 Total population growth: +2.3 abcd million of which: 85% from net migration 24 out of 31 countries (EU27/EEA/CH) had a net gain from migration 10 out of 31 countries (EU27/EEA/CH) had more deaths than births 22 Rainer Muenz

23 Challenges and Opportunities 23 Rainer Muenz

24 Challenges and Opportunities Growing customer groups: Generation 50+ Urban + sub-urban population Migrant population Mobile Europeans 24 Rainer Muenz

25 Challenges and Opportunities Changing needs Securing old age income in addition to mandatory 1st pillar pensions Portability of health and pension benefits Long-term care 25 Rainer Muenz

26 Challenges and Opportunities Main questions: Do we have the appropriate products? Do we use the right sales channels? Do we have a well prepared sales force? 26 Rainer Muenz

27 Examples Life insurance and pension plans for all ages Reverse mortgages Health and pension insurance for mobile Europeans and non-europeans Sales force 50 and older Sales force with migrant background 27 Rainer Muenz

28 Our main customers of tomorrow 28 Rainer Muenz

29 Our customers of tomorrow 29 Rainer Muenz

30 Contact 30 Rainer Muenz

Europe, North Africa, Middle East: Diverging Trends, Overlapping Interests and Possible Arbitrage through Migration

Europe, North Africa, Middle East: Diverging Trends, Overlapping Interests and Possible Arbitrage through Migration European University Institute Robert Schuman Centre for Advanced Studies Workshop 7 Organised in the context of the CARIM project. CARIM is co-financed by the Europe Aid Co-operation Office of the European