Aging workforce increases, with cocktail of insurance implications

As more and more over-65s remain in the workforce, producers will have a lot of work on their hands. Some, however, may have an advantage.

Workers Comp


Meager retirement savings and the still-lingering effects of a recent recession have kept thousands of older Americans in the workforce, data from the US Bureau of Labor Statistics reveals. In fact, one in three Americans aged 65 to 69—and nearly one in five between the ages of 70 and 74—are currently working.  

And with baby boomers continuing to age, that number may be even greater in coming years—a trend that will reverberate across several insurance lines, says Dr. Steven Weisbart, chief economist with the Insurance Information Institute.

“There are several implications,” Weisbart said, signaling that auto insurance, workers compensation and health insurance are likely the biggest concerns for both aging workers and the companies that employ them.

“At least some of these older people will continue driving to work at times when traffic is at its peak…and to the degree that their age is associated with reduced reaction time or other limitations, that would cause them to have more accidents,” he said.

This may impact auto insurance rates for older workers, who are already struggling to make ends meet. It is also concerning for business sectors that deploy older drivers, such as trucking or utilities services.

Businesses with older workers will also have to think of cost-saving measures in terms of workers’ compensation, Weisbart said.

“The data is pretty clear that people who are over 65 tend to have more injuries and illnesses, and when they do get sick, they tend to stay out longer than younger people,” he said. “This would cause workers comp claims to rise.”

Of course, health insurance is another concern for older workers. Weisbart noted that even though Americans over 65 qualify for Medicare, Medicare becomes a secondary payer if the individual already has employer-sponsored health insurance.

“Most claims would then be sent back to the employer, which would raise costs to employers providing healthcare,” he said.

This cocktail of insurance implications could complicate work for producers assisting both older individuals and their employers. However, Weisbart said some producers may have an advantage in this arena: their own age.

“Some of the agents themselves will be advancing in age, so it’s entirely possible that this will give them an advantage if they are dealing with clients a similar age,” Weisbart said. “This is compared with someone 30 years younger, whose client might say [the agent] doesn’t understand my values, my priorities, or my experience.”

He also pointed out that older producers will likely have lived through the 1979-1982 recession, “where interest rates were pretty much the opposite of what they are now and inflation was in double digits.” If that experience repeats itself, Weisbart said older producer will have the edge.

“I would argue that from an agent’s point of view…their advanced age and the advanced age of their customers could be a plus,” he said.

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