Longevity and retirement income
"The challenge is no longer just saving for retirement. It is creating income that lasts for life."
Australia is increasingly seen as a proving ground for modern retirement income solutions. In this interview, Andrea Stähr, General Manager Global Longevity at Hannover Re, and Kris Boundy, General Manager Reinsurance Business at Hannover Life Re of Australasia, discuss how longer lifespans are reshaping retirement systems, why flexibility and education matter, and what insurers globally can learn from Australia’s evolving approach to lifetime income.
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Why is longevity risk becoming such an important issue in retirement planning?
Kris: Longevity risk is the risk of people living longer than expected. From a consumer perspective, it means potentially outliving retirement savings. As life expectancy increases, retirees face a much longer planning horizon than previous generations.
What is often overlooked is that this can also lead to underspending. Many retirees become overly cautious because they are uncertain how long their savings need to last, which can negatively affect their quality of life during retirement.
This creates an important opportunity for insurers and superannuation funds to support customers not only during the accumulation phase, but also throughout retirement itself by helping convert savings into sustainable lifetime income.
Why do many people still underestimate longevity risk?
Andrea: Research consistently shows that people underestimate their life expectancy, sometimes by several years. Many base their expectations on the lifespan of parents or grandparents but underestimate the possibility of living much longer than previous generations. They often fail to recognise how significantly longevity has improved across generations. This contributes to a persistent gap between perceived and actual life expectancy that we observe across many markets globally. In Australia, for example, the average age at death for pensioners increased by more than five years between 1980 and 2020.
This creates a major challenge for retirement planning because a significant proportion of retirees may ultimately require income for far longer than expected.
What role does education play in improving retirement outcomes?
Kris: Education is critical because retirement decisions are becoming increasingly complex, while many markets are simultaneously facing adviser capacity constraints. This makes scalable guidance and clear communication more important than ever.
Experience in Australia shows that retirees often make strong decisions once product trade-offs and retirement risks are explained transparently and in practical terms.
For insurers and superannuation providers, this highlights the importance of combining suitable products with guidance that helps customers make informed decisions with confidence.
What makes Australia stand out in retirement income innovation?
Kris: Australia has a highly developed superannuation system with large accumulated retirement assets, supported by mandatory retirement contributions. It holds AUD 4.5 trillion in assets, making it one of the largest retirement savings pools globally relative to population size. At the same time, it faces many of the same challenges seen globally, including behavioural reluctance towards annuitisation, misconceptions around longevity, and limited diversification of retirement income products.
What makes Australia particularly interesting is the way the market is responding. Rather than relying heavily on standardised retirement products, there has been a strong focus on developing innovative solutions that better reflect how retirees actually want to use their savings – combining flexibility, liquidity, and income security.
The combination of a large retirement savings pool, low adoption rate for traditional retirement income products, and evolving consumer needs presents Australia as one of the most compelling retirement income markets to watch globally.
Kris leads Hannover Life Re of Australasia’s Reinsurance Business Development team. A Fellow of the Society of Actuaries (FSA) and the Canadian Institute of Actuaries (FCIA), she has worked across pricing and business development roles in both the Canadian and Australian insurance markets. What she particularly enjoys about her role is working with clients to solve problems and develop meaningful reinsurance solutions. In her free time, Kris enjoys travelling, spending time with her family, and staying active through sports such as ice hockey and squash.
"Education is critical because retirement decisions are becoming increasingly complex, while many markets are simultaneously facing adviser capacity constraints. This makes scalable guidance and clear communication more important than ever."
How has the discussion around retirement planning changed in recent years?
Andrea: There has been a significant shift in focus from helping people build retirement savings to helping them generate sustainable income throughout retirement. Historically, most attention was placed on the accumulation phase – ensuring people saved enough for retirement. Increasingly, the conversation is now centred on the decumulation phase and how those savings are converted into reliable lifetime income. The challenge is no longer just saving for retirement. It is creating income that lasts for life. This shift reflects a broader recognition that longevity risk is becoming one of the defining challenges for retirement systems globally.
In Australia, reforms such as the Retirement Income Covenant have accelerated this transition by encouraging superannuation funds to develop strategies focused on retirement outcomes rather than accumulation alone.
Growing market activity, new entrants, and continued product innovation demonstrate how the industry is evolving to address longevity risk and support better retirement outcomes.
Why do many retirees still prefer to self-manage longevity risk?
Kris: Australia has traditionally had a very strong investment culture and a “nest egg” mentality, where retirement savings are viewed as capital to manage rather than a source of lifelong income.
As a result, many retirees prefer solutions that preserve flexibility and access to their savings. Account-based pensions, for example, allow individuals to retain control over their assets and investment decisions throughout retirement.
While this approach offers flexibility, it also means retirees largely remain responsible for ensuring their savings last throughout retirement. For insurers, this highlights the importance of developing retirement income solutions that combine protection with the flexibility customers value.
How are retirement income products evolving in Australia?
Andrea: Many newer products combine lifetime income protection with features such as flexible withdrawals, investment-linked returns, liquidity options, and reversionary structures for couples.
What makes these products particularly interesting is the way they balance longevity protection with customer flexibility. Rather than relying on traditional fixed structures, many solutions are designed to adapt to changing retirement needs and preferences over time.
This shift has encouraged a more integrated approach to product design, pricing, structuring, and behavioural analytics in the development of flexible retirement solutions. This evolution is also driving closer collaboration across insurers, reinsurers, asset managers and superannuation providers to bring innovative and sustainable retirement solutions to market.
Andrea heads Hannover Re’s Global Longevity team. A Fellow of the Institute and Faculty of Actuaries (FIA) and Chartered Enterprise Risk Actuary (CERA), she has extensive experience in longevity risk management and reinsurance structuring. She is passionate about developing innovative solutions that help clients address longevity risk and support sustainable retirement outcomes. Her interests outside work include spending time with her family, cycling, and exploring Europe by train while discovering local food and cultures along the way.
"One of the most important lessons is that retirement solutions cannot be one-size-fits-all. Products must reflect local behaviours, regulatory frameworks, and customer preferences."
What lessons can insurers in other markets learn from Australia?
Andrea: One of the most important lessons is that retirement solutions cannot be one-size-fits-all. Products must reflect local behaviours, regulatory frameworks, and customer preferences.
Another key lesson is the importance of combining global expertise with local market understanding. While longevity challenges are increasingly shared across markets, customer expectations and retirement behaviours can differ significantly.
The organisations that succeed will be those that can translate technical complexity into solutions that feel simple, intuitive, and relevant for customers.
What makes working in the longevity and retirement field particularly rewarding for you?
Andrea: Longevity combines highly technical topics with a very real human impact. Working closely with clients to shape solutions that support people financially throughout increasingly longer lives makes the work both professionally fascinating and personally meaningful.
Kris: For me, it is rewarding to work on solutions that help retirees feel more confident about their future. Retirement is one of the biggest financial transitions people experience, so being able to contribute practical solutions that genuinely improve outcomes is something I find very motivating.
Andrea Stähr General Manager, Global Longevity Hannover Re Tel.: +49 511 5604-2189 Mail: andrea.staehr@hannover-re.com
Kris Boundy General Manager, Reinsurance Business Hannover Life Re of Australasia Tel.: +61 2 9251-6911 Mail: kris.boundy@hlra.com.au
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