If you think dealing with older insureds will be tough for auto insurers as reflexes, sight and hearing fail elderly drivers, imagine what challenges await workers' compensation carriers as the Baby Boom generation goes bust! The only consolation for underwriters might be that they are not alone. Unlike with coverage for individual drivers, insurers get to share the responsibility for limiting the hazards facing our exploding senior population with risk managers.
In the second part of his speech before the National Underwriter Company's recent annual Property-Casualty Executive Conference, Steven Weisbart, vice president and chief economist for the Insurance Information Institute, in his luncheon address on "The Effect Of The Aging Population On The Property-Casualty Insurance Industry," talked about the problems workers' comp carriers and their commercial policyholders will face before too long.
"More people will be working longer than they have ever been," he said. "Given the uncertainty of retirement income" (with defined benefit pension plans fading away), he added, "most people will have to work longer," while improvements in health care means most might like to keep active, personally and professionally.
The problem, however, is that "seniors tend to take longer to return to work" after being injured on the job, he noted, meaning higher indemnity and medical care costs for carriers. He also mentioned that the fatality rate for those over 65 on the job is triple that for the 35-to-44 age group.
Don't expect to dump any costs on Medicare or Social Security disability, he warned, noting that if workers' comp is available, Medicare won't pay--and they'll go to court to keep from paying if they must.
Risk managers will be challenged as well. "The workplace of the future will have to be redesigned to accommodate a surge in older workers," he said. Brighter lighting, larger-type signs and other changes to help seniors do their jobs better while assuring their safety will have to be made.
(Would more seniors consider telecommuting? That would be especially helpful to keep those off the road whose senses or driving skills are at all impaired.)
The trends aren't all negative, Mr. Weisbart was quick to point out. "Seniors could help relieve the coming labor shortage for many industries, including insurance, even if they only want to work part time," he said, noting that elderly claim adjusters, customer service representatives and even insurance agents could become the norm rather than the exception.
Instead of seeing this trend only as a threat to be managed, insurers and risk managers should seize the opportunity to bolster their workforce with seniors while improving loss control for everyone.
After all, if the country remains determined to keep immigration to a minimum (legal or otherwise), and with such a low domestic birth rate, where else will we get the workers necessary (not just in numbers, but in quality) to keep our economy going?
These days, you often hear about companies offering buyouts to entice workers to retire early. Before long, you might hear about companies paying lucrative incentives to convince these experienced, knowledgeable workers to stick around.
As I am about to turn 50 next year, I don't mind the sound of that at all!
