Investing in longevity

 

Tratto da Juliusbaer.com

 

The earth is now home to over 8 billion inhabitants, with the global population expected to reach 9.7 billion by 2050. As humans live longer and find ways to extend longevity, this presents new investment opportunities.

 

The number of people over 65 is expected to significantly increase by 2050.

Tremendous progress in medical science has enhanced the quality of healthcare and disease prevention efforts. Life expectancy has improved thanks to better medical care, hygiene and diets.

 

The interest is growing

With the growing interest in longevity, and the changing demographics, our Next Generation Research team has identified five business segments to keep on the radar:

  1. Nutrition and healthcare:Medical care services for age-related chronic diseases and health conditions, as well as increased demand for supplements and nutritional programs.
  2. Elder care:As people over 65 face increased difficulty hearing, seeing, remembering and walking, there is also opportunity in services that help with these difficulties.
  3. Financial planning:With extended longevity, people must rely on retirement savings and pensions longer. This makes saving or investing for retirement even more important.
  4. Beauty: Beyond the biomedical and healthcare aspects of extended longevity, anti-aging products and the global beauty industry continue to remain resilient and appeal to a wide audience.
  5. Leisure:Higher discretionary income among older adults means more opportunities for leisure-time activities such as cruises and wellness.

Long-term care needs

Due to rising chronic diseases and changing consumer preferences for healthier lifestyles, the megatrend of an ageing population presents new investment opportunities.

 

 

It is never too early or late for anyone to start working towards improving longevity, and ample studies have shown that the long-term effects of good and bad lifestyle habits are cumulative.

This leads to the development of new products and services that aim to improve the quality of life for older adults, as well as younger individuals planning for life in their advanced years.

Ageing is an irrevocable biological process, characterised by the progressive decline in cognitive and physical functions across all organ systems. Nearly 8 per cent of people above 65 in Singapore, or about 50,000 people, face issues relating to mobility. Some 25,000 people, or 4 per cent of the population, have difficulty caring for themselves.

Ageing includes a progressive decline in cognitive and physical functions.

Frailty in old age is often accompanied by the onset of chronic diseases and certain health conditions, such as Alzheimer’s disease, cancer, cataracts, diabetes, hearing loss, heart disorders, osteoarthritis and sarcopenia.

As the population ages, specific segments of the healthcare industry such as pharmaceuticals and medical equipment – which cater to the growing medical needs of older adults – will become ever more pertinent.

 

Leisure activities

Beyond the physical biomedical and healthcare aspects of extended longevity, the mental and social aspect comes into play. Travel and leisure activities, as well as beauty and anti-aging products could also see significant growth.

The global beauty industry is said to be worth around US$420 billion and is likely to remain resilient, partly supported by an ageing population that still wants to look good. While many key markets across Asia-Pacific, Northern America, and Western Europe, accounting for nearly 80 per cent of spending in 2022, took a hit during the pandemic, the industry has seen a solid recovery and continues to grow.

Vacation as the top priority

According to a recent survey conducted by the American Association of Retired Persons, as many as 85 per cent of adults in the United States who are above 50 rank travel and vacation as the top priority for their discretionary spending.

The World Tourism Organization expects the improvement of the travel industry to continue throughout 2023 despite global economic and geopolitical challenges. According to statistics from Cruise Lines International Association, the largest trade association in the cruise industry, the sector has begun to see a rebound in the number of passengers worldwide.

Although the number of travellers – at roughly 20 million in 2022 – is still low compared with pre-pandemic times, the industry should see further engagement – especially among older consumers.

After all, more than half of all cruise passengers are above the age of 45. The 65-plus age cohort represents a third of the total due to the appeal and convenience of visiting multiple countries in a single holiday, along with all-inclusive food, drinks and accommodation.

 

Short-term headwinds

Although the extended longevity theme remains attractive due to its underlying protracted structural forces, it is confronted with a few challenges over the short term, such as drug pricing, inflation and resources.

Nevertheless, a world home to a larger number of older adults, as well as individuals with longer lifespans, will affect consumer patterns and lead to involuntary changes, as a result of the growing prevalence of chronic diseases and the need for care.

The megatrend of population ageing inevitably presents investment opportunities spanning healthcare, elderly care, beauty, leisure and travel, food and nutrition, and financial planning over the longer term.

 

 

 

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