A confluence of demographic and economic trends make longevityrisks perhaps the biggest growth opportunity for insurers, butwriting such long-tail coverage profitably also might present theindustry with its biggest challenge in the decades ahead.

Retirement financing and securing lifetime income are the mainobjectives for most annuities holders today, according to thelatest "Voice of the Insurance Consumer" survey by Deloitte’s Center for Financial Services. Thatmeans the stage is already set for potentially dramatic marketexpansion, given estimates by the Pew Research Center that roughly10,000 Baby Boomers will turn 65 every day between now and2030.

Related: Americans are getting older, and that'sworrisome

Add to that phenomenon the potential for ongoing lifespanextensions due to continuing advances in medical care, as well asexpanding access to health insurance and wellness programs drivenby the Affordable Care Act, and one can see why longevity shouldbecome an even more widespread and pressing concern.

Worries about living too long

In other words, more people will likely worry about living toolong rather than dying too young as we head deeper into thiscentury.

Also keep in mind that fewer and fewer people going forward cancount on pensions from defined benefit retirement plans. EvenSocial Security benefits may be at best uncertain over the longhaul, given that current payments have already started to exceedcontributions.

In such an environment—with an increasing percentage of thepopulation having to account for their own retirement income, anddo so over a longer period of time—it’s logical to hypothesize thatinsurers are destined to have a rising number of prospects at leastinterested in products reassuring them that they won’t outlivetheir assets.

Some carriers are seizing the opportunity to bolster their shareof the longevity market in a big way by taking on the pensionobligations of employers looking to offload defined benefit plans.Longer term, with the transition to defined contribution plansaccelerating, the 401(k) system should provide a natural platformfor longevity solution marketing, reaching prospects who are primecandidates for guaranteed lifetime income products.

Recent federal advisories should help facilitate the use of thischannel for annuity sales. The Internal Revenue Service (IRS) lastyear issued rules allowing individuals to buy longevity annuitiesin both their 401(k) and Individual Retirement Accounts. Then lastOctober, the IRS put out a notice allowing employers to includeannuities in target-date mutual funds that often serve as a defaultinvestment option in 401(k) plans. The Department of Labor followedup with a letter of its own confirming that possibility.

However, while opportunities for growth appear to bemultiplying, the challenge remains as to how carriers will be ableto fulfill longevity income commitments and still earn a positivereturn.

Stay engaged with customers

Going forward, carriers will need to carefully consider how theydesign, model, and price longevity products to meet economictargets and reduce downside risk over the long term as lifespanskeep rising.

It’s also likely a good idea to stay engaged with customers overthe life of a longevity policy, rather than just treat them as aone-time sale. Indeed, Deloitte’s consumer survey found that fourin 10 annuity buyers had purchased more than one such product overthe years, primarily to fortify their retirement security andbolster an income stream that they can’t outlive.

What else do you think insurance carriers can do to help clientsadapt to life in a society and economy where living to a ripe, oldage is increasingly likely to be the rule rather than theexception?

Sam Friedman ([email protected]) isinsurance research leader with Deloitte’s Center for FinancialServices in New York. Follow Sam on Twitter at @SamOnInsurance, as well as on LinkedIn. These opinions are his own.