How Demography Will Shape the World of the Future

Imagine an analog clock. The long, frantic hand represents politics; the minute hand is economics; the short, slow but decisive one is demography. Alfred Sauvy, founder of the French National Institute for Demographic Studies (appointed in Paris by President De Gaulle in 1945), once said that the short hand “is the most important, even if it seems motionless”: the slow pace of demographic change makes it heavy with consequences, even when contemporaries fail to see or underestimate them. I believe this clock is also a useful analogy for the insurance sector, which operates in balance between immediate risks and long-term trends. Starting from this, and from Italy’s situation, I’d like to explain why we all need to become at least a little bit demographers.

The demographic transition has transformed our lives. In Italy, life expectancy has risen from about 54 years in 1924 to 83.4 years in 2024 — almost thirty extra years per person. That’s roughly four additional months per year, or eight extra hours per day, accumulated over a century. As if we aged only 16 hours a day — with a bonus for the rest of it! This transformation has changed our concept of the future — as individuals, as a society, and as an economy.

Today we can plan, invest, and build. But we must not make the mistake of thinking demography is a predetermined fate. Although it’s inertial, demography is influenced by economic and political choices — and these, in turn, can create rapid shifts with long-lasting effects on population profiles.

To understand the scale of the transformation, consider Italy’s age pyramid at the time of national unification. In 1861, one in three Italians was under 15, and only 4% were over 65. High mortality meant many young lives were lost, weakening generational balance. Today, the shape has flattened: more cohorts survive and move up the pyramid, bringing with them new needs, aspirations, and risks.

Demography is slow — which makes it ideal for modeling long-term scenarios. Italy now ranks among the most aged countries in the world. In 2024, over 24% of the population is 65 or older, compared to just 12.5% underage. Behind this lies another record: extremely low fertility, with just 1.18 children per woman — the lowest ever recorded.

Demographic inertia offers some certainties about tomorrow: the 379,000 babies born in 2024 will, absent migration, define the maximum number of 20-year-olds we’ll have in 2044. The “demographic ship” makes this journey visible: a narrow base (births) and expanding upper decks (the elderly).

Political choices, economic dynamics, and shocks can still influence even the “short hand” of demography. The COVID-19 pandemic was a stark example — a shock that demanded quick responses and had long-term effects on health, work, and education. Intervention is possible, but it requires policies based on a dual vision: some measures have gradual, cumulative impacts; others affect intermediate stages immediately.

In a low-fertility country, immigration is already a vital demographic response. Unlike births, which impact the population slowly, incoming migration directly affects the middle decks of the ship. Although not historically a major immigration country, Italy has experienced an exceptional surge since the 1990s: from 356,000 foreign residents in 1991 to over 5 million today, with more than 1.8 million citizenships granted in 20 years. In 2024, foreign residents represent 9.2% of the total population — a record.

We must organize integration as an investment in human capital — through language, education, and work pathways — and simplify access to citizenship for those born or raised in Italy. In rural areas and small towns, where depopulation and aging are more rapid, the arrival of migrant families can be part of a territorial rebalancing strategy.

We have few children and young people. And how do we treat them? Not particularly well. Education is the foundation of human capital: what happens between ages 0 and 25 shapes the skills people carry throughout their lives. If we want to thrive in a longer-lived, dynamic society, we must cultivate every talent — especially the hidden ones.

Another record, though a bittersweet one: in 2024, 31.6% of Italians aged 25–34 hold a university degree — the highest level ever in Italy. However, compared to other countries, we still rank second to last in the EU.

What can be done? Start with schools: extend compulsory education to 18, create stronger general foundations in secondary school, delay specialization, and grant schools more autonomy and responsibility — with incentives focused on learning outcomes. We must also support young people’s residential autonomy — from student housing to affordable rentals for first jobs and starting families. Public-private partnerships are essential to build a deeper, more inclusive rental market.

This is also a talent retention strategy. Italy must appear to young people as a country offering high quality of life — but also openness, inclusiveness, and global opportunity. Otherwise, the most ambitious will continue to plan their departure.

What are the Challenges for the Insurance Sector?

Successful aging is an achievement — especially on the individual level. In our time, and in Italy, it’s happening for the first time in human history. But it changes the risk profile people face and the kind of protection they need.

For the insurance sector, this requires risk governance that can balance short-term volatility with long-term drift: pricing and reserves must factor in slow-moving trends (aging, declining births, family transformation) alongside potential exogenous shocks (pandemics, extreme climate events, migration waves, technological revolutions).

Three key themes emerge:

1. Longevity Risk Management
   We must innovate in designing annuities, pension plans, and lifelong products that combine decumulation, duration guarantees, and flexibility in response to fragmented career paths.
2. Long-Term Care
   As chronic conditions rise during longer lives, LTC becomes central. We need modular products integrated with local health networks and home care technology, with a strong focus on preventing loss of independence. Health care is shifting from treatment to prevention across the life course. Digital transformation — if well managed — enables personalized medicine, remote monitoring, and treatment adherence. But it also introduces new risks (mental health, digital addictions) that require tailored coverage and wellbeing programs
3. Youth and Human Capital
   The future of companies lies in today’s schools and universities. Investing in human capital reduces both macro risks (low growth, poor productivity) and micro risks (claims linked to socioeconomic fragility).

Insurers can activate three levers:

• Educational solutions, such as policies tied to learning objectives (e.g. micro-scholarships, student income protection, family drop-out coverage).
• School-business partnerships, supporting increasingly scientific educational paths (not just STEM).
• Talent programs, including selection and upskilling initiatives to reduce mismatches and increase participation — aligned with the goal of leaving no potential untapped.

Italy is sailing on a “pioneer ship” of aging. This brings real challenges — shifting dependency ratios and a labor market with smaller cohorts — but also creates opportunities for exportable competitive advantages: the silver economy, technologies for autonomy, home-based care models, and human capital that, if well-trained, can position us in the heart of global value chains.

This course won’t change with slogans or nostalgia. We need data, experimentation, and policies that stop chasing the present and start governing it. Time on the clock moves forward even if we don’t touch it. But we can move the hands. For an insurance group, the message is clear: contribute — through products, investments, and partnerships — to move those hands in the right direction, transforming predictable risks into sustainable protection and inclusive growth.

Demography doesn’t dictate destiny; it offers a map. It’s up to us, today, to decide where to build the ports, how to equip the ship, and which currents to ride. If we use the long view of the clock — and its sudden movements when needed — then “tomorrow is today” can become not just a slogan, but a shared project.