Life insurers race to win retirement customers as distribution shifts

Life insurers are competing for access to customers approaching retirement as population aging and changing pension systems increase demand for financial advice and reshape distribution channels.

A new report from the Swiss Re Institute examines how insurers, independent advisers, banks and digital platforms compete to reach customers and influence their financial decisions.

More than 4 million Americans are expected to turn 65 each year for most of this decade, said James Finucane, head of life and health economic research at Swiss Re. At the same time, more retirees must manage their own savings and decide how to turn them into income that can last throughout retirement.

“The big change is demographics and population aging,” Finucane said. “Back in 2010, about one in eight Americans was age 65 or older, and today it’s about one in five, and that number is continuing to grow.”

These changes are creating demand for solutions addressing retirement income, long-term care and wealth transfers. For insurers, reaching customers before they retire is becoming increasingly important as they make decisions that can affect their financial security for decades.

Advisers remain central

Independent intermediaries distribute about 60% of individual life insurance business in the United States, an increase of more than 8 percentage points since 2019, according to Swiss Re. In France, banks account for roughly two-thirds of life insurance premiums.

The differences reflect how local markets and established customer relationships shape life insurance distribution. The report does not identify one model as dominant across all markets.

Finucane said the growing share of independent intermediaries reflects several factors, including technology, consolidation and demographic changes. Insurers are using a wider range of channels to reach customers, rather than relying on a single distribution model.

The report identifies people ages 50 to 65 as an important group for insurers to reach. Decisions about retirement income, wealth transfers and long-term care often need to be made before those needs arise.

Three areas stand out for life insurers: converting savings into retirement income, preparing for potential long-term care costs and planning how wealth will pass to beneficiaries. Annuities, long-term care insurance and hybrid products can address different parts of those needs, Finucane said.

The shift also changes the role life insurance can play in retirement planning. While traditional life insurance provides financial protection against a policyholder’s death, insurers are also positioned to help address longevity risk, or the possibility that someone will outlive their savings.

That makes early engagement important, Finucane said. Customers approaching retirement may need to consider several financial risks before they become immediate concerns, including how long their savings must last and whether they can cover future care expenses.

Consolidation shifts bargaining power

Distribution is also changing as intermediaries expand through acquisitions.

In the United States, three private equity-backed independent marketing organizations completed more than 300 publicly announced acquisitions involving distribution businesses between 2017 and 2025, according to Swiss Re.

Larger distributors can spread technology and compliance costs across more operations. Their scale can also strengthen their negotiating position with insurers, the report said.

Finucane said consolidation can create economies of scale while making intermediaries increasingly important as a route to customers.

For insurers, this puts added emphasis on maintaining relationships across distribution channels. The Swiss Re report identifies product differentiation, underwriting and service capabilities as factors that can help carriers secure distribution access.

The trend does not mean insurers can rely on one channel to reach every customer. Distribution structures vary by market, and the report points to the importance of positioning products through the channels that influence customers’ financial decisions.

Technology changes the equation

Digital tools and artificial intelligence are changing how insurers and intermediaries engage customers, process applications and provide ongoing service.

Swiss Re reviewed 197 publicly reported AI and technology initiatives announced by leading global life insurers and selected intermediaries from 2022 through 2026.

The report found the largest concentration of initiatives in customer engagement and servicing, followed by advice and quotation.

Finucane said AI and digital tools are increasingly handling routine tasks such as gathering customer information, comparing products and processing applications. That can give advisers more time to focus on decisions that require human judgment and trust.

Retirement planning is one area where that distinction matters. Customers may need to weigh income, savings, care costs and inheritance plans, which can involve interconnected financial decisions rather than a single product purchase.

Technology may also change how insurers compete for customer relationships. It could help independent intermediaries serve more customers, while giving insurers new ways to communicate directly with policyholders.

Finucane said the effect of AI on distribution remains uncertain. “You could imagine a scenario where technology continues the trend of independent intermediaries growing their share of the market, but there are also cases where carriers are able to use AI to boost direct sales as well,” he said.

He added that it remains to be seen whether AI reinforces existing distribution trends or creates new ones.

For insurers preparing for the next wave of retirees, Finucane said product innovation, particularly in annuities, and a multichannel approach will be important. Carriers will need to maintain relationships with affiliated distribution while also building connections with independent networks.

The report argues that insurers’ competitive position will depend not only on the products they offer, but also on whether they can reach customers when important financial decisions are being made.

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