The financial services industry needs to think about people spending 50 years retired, a study reveals.

The Actuaries Institute says rapid improvements in life expectancy presents risks for insurers and other financial services product providers.

A study by Actuaries Institute CEO Melinda Howes and Professional Financial Solutions Principal Barry Rafe says longevity is a “black swan” event for all Australians.

“Financial services businesses and trustees of super funds need to start thinking differently if they want to stay viable,” Ms Howes said.

“With a potential 50-year retirement phase, companies need to work out how to deliver a seemingly impossible combination of income protection plus the flexibility to move in and out of products over time.”

She says predicting gradual increases in life expectancy has been simple based on experience.

“But normal modelling techniques cannot handle things like major medical breakthroughs, such as curing cancer or making body parts, or sudden change including pandemics,” Ms Howes said.

“The fact is we just don’t know what the future holds.”