The director general of the Association of British Insurers says companies need to prepare for the day when living to 100 becomes the norm.
Otto Thoresen told actuaries that some firms offering life insurance, pensions and related products are already making calculations that take into account the risk -- however slim -- that a policyholder could live to 120 or more.
The Office of National Statistics reports that the number of people aged 100 or more has risen by 400 percent since 1980. The government has forecast that more than a quarter of children in Britain today will live past 100.
The statistics could also mean serious changes to the way medical insurance firms price their policies and the conditions they impose.
Thoresen warned that it's not simply the longer lifespans that could affect insurance and pensions. He noted that the trend could also spell the end of the current culture of people working to a fixed date and then moving straight to retirement. It's likely many future "pensioners" will work longer but move into part-time or lower-paid jobs, radically changing their expectations and needs for when and how they'll need their incomes supplemented.