P&C insurance market prepares for demographic shift by 2050: Capgemini

45% of consumers expect to spend more on lifestyle upgrades.

By 2050, the property and casualty (P&C) insurance sector is forecast to change with global dependency ratio expected to increase to 26%, according to Capgemini Research Institute.

For 2024, the ratio was recorded at 16%. Excluding Africa, which has a younger population, the ratio will rise to 31%, compared with 18% today. 

This shift means fewer working-age individuals will be supporting a growing senior population, leading to changes in economic structures and consumer priorities.

Spending habits are already beginning to shift, with 45% of consumers expecting to spend more on lifestyle upgrades such as travel, luxury goods, and home renovations. 

Meanwhile, 70% say they do not plan to buy an additional house or upsize their current home. 

These changes, combined with increasing urbanisation and automation, are prompting insurers to transition toward more modular, preventive service models with real-time risk monitoring.

The report anticipates significant implications for both commercial and personal P&C insurance. 

Auto insurers will need to adapt to reduced personal vehicle use and increased reliance on shared mobility. 

Property insurers will face demand for age-friendly, preventive solutions suited to smaller, multi-generational homes. 

Commercial insurance will also evolve as older workforces and increased automation shift risk profiles.

Capgemini’s Global Insurance Industry leader, Adam Denninger, noted that insurers must analyse their portfolios to assess exposure in ageing and transitional markets. 

He emphasised that enhancing customer experience through AI could help insurers stay competitive without resorting to price cuts.

Despite 88% of insurers recognising the importance of advanced underwriting, only 17% report having mature capabilities.