Saving sufficient funds is one part of the retirement equation — working out how to turn those savings into an income that lasts for a life that could last another 30 years is the next challenge.

That was one of the key takeaways from a panel on geopolitics, demographics and the global retirement gap at the Bermuda International Life and Annuity Conference this week.

Insurers and reinsurers have a key role to play in enabling retirees to meet their financial needs, given that most now face the decisions that come with finishing work with an accumulation of savings, rather than a pension.

Rob Jamieson, senior vice-president of Fidelity Investments and chairman of the Insured Retirement Institute, said today’s retirees faced problems that early generations had not.

The “decumulation phase” involved retirees managing risks including market volatility, longevity, inflation and timing of withdrawals, he said.

“These were risks that used to be managed by institutions — now they’re managed by us,” he said.

Given the increase in life expectancy, Mr Jamieson said when an average couple hits 65, there’s about a 25 per cent chance that one of them will live to the age of 95, meaning the retirement nest egg would have to generate 30 years of income.

“And you’re not worrying about how much things cost today — you have to think about what it would cost ten or 20 years from now,” Mr Jamieson added.

The panel said the insurance industry can provide solutions, such as annuities, to generate an income stream throughout retirees’ golden years.

By pooling longevity risk and managing assets over the long term, insurers can provide the professional support retirees need to make their savings last, the panellists agreed.

Kendra Isaacson, partner at Mindset in Washington, said people generally struggled to manage their retirement savings efficiently and that insurers “could actually save people from themselves”.

“The experience in retirement is either feast or famine,” she said. “There’s a study that shows if you get a lump sum for your retirement, the majority of people spend it within five years.

“But then you have people on the other side who are terrified to spend the money. Not many people are in-between, just hitting the right mark, and that’s where insurance may come in, and play role in making sure that people have a dignified, and easier retirement.”

Quentin Marsh, senior vice-president, Americas Institutional Markets, RGA, said the industry had work to do in building effective solutions that met consumers’ expectations and were simple to understand.

He said life reinsurers, like those in Bermuda, provided an extra layer of security in the retirement income system, providing capital and financial back-up to insurers selling annuities direct to retirees.

Moderator Amy Kessler, president of TIAA’s Bermuda companies, said the re/insurance ecosystem had been remarkably successful in sourcing the vast amounts of capital needed for the retirement income system to function.

“When I moved into the retirement security space 20 years ago, everybody said there would never be enough capital,” Ms Kessler said.

“There would just never be enough capital for pension risk transfer, or to create a meaningful, deep pool of annuity promises for the people who need it.

“I know we all are tremendously proud of the fact that here, 20 years later, I can't think of a situation where this industry hasn’t brought forth the capacity to keep the annuity promises moving forward in the world.”