Vince Cable has admitted Britons will have to take greater responsibility for their own protection needs in the future following the welfare reforms.
The Secretary of State for Business Innovation and Skills also explained the future of personal long term care is the most awkward question currently being considered by the government.
Speaking at the ABI biennial conference, Cable noted the need for government reforms and that individuals would have to take greater care for themselves.
"There is going to have to be a re-balancing of responsibilities because there are certain aspects of the welfare state that are running out of control," he said.
"There are bits of the welfare state where we have underpinned the state's obligation (for example pensions), but there are others (for example incapacity benefit and invalidity benefits) where we are having to take some very tough and at times unpopular decisions.
"If the state isn't going to fund things on an open ended basis there's got to be greater private responsibility," he added.
And the Business Secretary acknowledged that care for elderly people was one of the greatest challenges facing the current administration.
"The really big awkward decisions are around personal care and the mix of state support, insurance and combinations of policies that we're going to have to roll out in the coming months.
"Personal care is the really difficult one."
Cable also announced a review of investor behaviour to promote more stable and long-term investment growth and a consultation into bringing rocketing executive pay back into line with the rest of the population.
