RGA CEO Warns Americans Face Growing Longevity Insurance Gap as Life Expectancy Hits 79 Years

Reinsurance Group of America CEO Tony Cheng has warned that rising life expectancy in the U.S. is creating a dual challenge for insurers and policymakers: while longer lifespans are a positive for humanity, they also amplify the risk of individuals outliving their savings. Speaking to Fortune, Cheng emphasized that this "longevity insurance gap"—the mismatch between extended lifespans and insufficient retirement preparedness—requires systemic changes and greater financial literacy. Unlike traditional mortality risks, which insurers manage through death benefits, longevity risk involves underwriting the financial strain of people living longer than expected, a scenario that strains both public and private systems [1].

Cheng highlighted that U.S. life expectancy has risen from 75 years in 1990 to nearly 79 in 2022, with G7 nations averaging 82.5 years today. While these gains reflect societal progress, they also underscore a growing disconnect between expectations and financial realities. Many Americans, for instance, prefer lump-sum payouts over lifetime annuities, even though the latter could better align with extended retirement horizons. This behavioral trend, Cheng noted, is a "human trait" that complicates efforts to close the insurance gap [1].

The CEO also dismissed the idea that increased longevity would reduce demand for life insurance. Immediate needs—such as covering mortgages after a sudden death—continue to drive uptake. However, he stressed that the real threat lies in the gradual realization that people may exhaust their savings as lifespans stretch. This awakening, he warned, could come "too late," especially as government support dwindles under budgetary pressures. The result, he argued, would be a reliance on private solutions that remain underdeveloped or inaccessible for many [1].

Cheng outlined a multifaceted approach to address the issue. Governments must improve financial education and bolster social safety nets, while the private sector needs to innovate products like annuities that bridge the longevity gap. Consumers, meanwhile, must shift from short-term thinking to long-term planning. Yet he acknowledged the complexity of aligning these efforts: "It’s so many parts of the ecosystem that need to work before it’s effective." For instance, wealthier individuals may already have mechanisms to manage longevity risks, but underserved populations remain heavily dependent on strained public programs [1].

The urgency of the issue is compounded by generational divides. Younger Americans, increasingly aware of systemic underfunding in retirement systems, face heightened economic anxiety. Cheng echoed broader concerns that older generations have prioritized their own financial security at the expense of future retirees, a dynamic that exacerbates distrust in institutional solutions. Addressing this requires not just policy reforms but also a cultural shift toward proactive retirement planning [1].

As the U.S. population continues to age, the longevity insurance gap will test the resilience of both insurers and policymakers. Cheng’s warnings underscore a need for coordinated action across sectors to ensure that longer lifespans translate into sustained financial security rather than unmet expectations. Without such measures, the risk of individuals outliving their savings will become a defining challenge of the 21st century [1].

Sources:

[1] [RGA CEO Tony Cheng: Americans are living longer—adding risk for insurers—but the real danger is people outliving their savings](https://fortune.com/2025/07/27/rga-ceo-warns-outliving-savings/)