Longevity in the 21st Century

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Longevity in the 21st Century

• Richard Willets

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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

3
Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

4
Background

• The UK Actuarial Profession established a
  Working Party in 2003 to produce a review paper
  on longevity trends
• Richard Willets (chairman)
• Adrian Gallop
• Tony Leandro
• Joseph Lu
• Angus Macdonald
• Keith Miller
• Stephen Richards
• Neil Robjohns
• John Ryan
• Howard Waters

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Background

• The paper Longevity in the 21st Century was
  presented to the Faculty of Actuaries on 15 March
  2004 and the Institute of Actuaries on 26 April
  2004
• A separate paper The cohort effect insights
  and explanations (Richard Willets) was presented
  at the same meetings

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Background

• A Working Party of the Continuous Mortality
  Investigation Bureau (C.M.I.B.) is considering
  the issue of future mortality projection
• New projections are planned for 2005 to be used
  with new 00 series tables
• This group published Working Paper 3
  Projecting future mortality a discussion
  paper in March 2004
• A recent seminar at Staple Inn backed the call
  for measures of uncertainty in projections

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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

8
20th Century Trends
Reduction in the mortality rate for males aged
65-74 in the England Wales population since 1901

• 20 fall between 1901 1969 (68 years)

Source own calculations using O.N.S. data
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20th Century Trends
Reduction in the mortality rate for males aged
65-74 in the England Wales population since 1901

• 20 fall between 1901 1969 (68 years)
• 20 fall between 1969 1986 (17 years)

Source own calculations using O.N.S. data
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20th Century Trends
Reduction in the mortality rate for males aged
65-74 in the England Wales population since 1901

• 20 fall between 1901 1969 (68 years)
• 20 fall between 1969 1986 (17 years)
• 20 fall between 1986 1996 (10 years)

Source own calculations using O.N.S. data
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20th Century Trends
Reduction in the mortality rate for males aged
65-74 in the England Wales population since 1901

• 20 fall between 1901 1969 (68 years)
• 20 fall between 1969 1986 (17 years)
• 20 fall between 1986 1996 (10 years)
• 20 fall between 1996 2002 (6 years)

Source own calculations using O.N.S. data
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At the beginning of the 21st Century we are
observing accelerating rates of improvement at
older ages
20th Century Trends
Average annual rates of mortality improvement for
males in the population of England Wales
Source own calculations using O.N.S. data
trend lines fitted using log linear regression
Note mortality improvement is taken to mean
the reduction in mortality rate
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At the beginning of the 21st Century we are
observing accelerating rates of improvement at
older ages
20th Century Trends
Average annual rates of mortality improvement for
females in the population of England Wales
Source own calculations using O.N.S. data
trend lines fitted using log linear regression
Note mortality improvement is taken to mean
the reduction in mortality rate
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Heart disease mortality is falling sharply
20th Century Trends
Heart disease deaths per 1,000,000 males aged
60-69 in England Wales
Premature death from heart disease in England
could be almost unheard of within a decade
Source own calculations using O.N.S. data
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Mortality rates are falling in other causes
20th Century Trends
Deaths per 1,000,000 males aged 60-69 in Eng
Wales
Cancer
Stroke
Source own calculations using O.N.S. data
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20th Century Trends

• Future projections should be grounded in as good
  an understanding of the past as possible
• The paper focuses on five key forces currently
  shaping the pattern of mortality change

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20th Century Trends

• The paper focuses on five key forces currently
  shaping the pattern of mortality change-
• The UK cohort effect
• The ageing of mortality improvement
• Past patterns of cigarette smoking
• Increased uncertainty at younger ages
• Widening social-economic class differentials

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Rate of mortality improvement by age group and
decade females in England Wales
The UK cohort effect
Source own calculations using O.N.S. figures
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Rate of mortality improvement by age group and
decade females in England Wales
The UK cohort effect
the cohort effect
Source own calculations using O.N.S. figures
20
Rate of mortality improvement by age group and
decade males in England Wales
The UK cohort effect
the cohort effect
Source own calculations using O.N.S. figures
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Mortality projections
The UK cohort effect

• Faster improvements have been observed for the
  UK generation born 1925-1945 centred on 1931
• This feature has been explicitly allowed for in
  G.A.D. mortality projections since the 1990s
• In 2002 the C.M.I.B. published a paper which
  described a similar effect in insurance and
  pensioner data centred on 1926
• The C.M.I.B. published three interim
  projections which allowed for this feature (known
  as the short, medium and long cohort
  projections)

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Impact of year of birth in a model of mortality
change for males in the population of England
Wales
The UK cohort effect
Source own calculations using O.N.S. figures
23
Impact of year of birth in a model of lung cancer
mortality change for males in the population of
EW
The UK cohort effect
Source own calculations using O.N.S. figures
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The UK cohort effect
Female cumulative constant tar cigarette
consumption (CCTCC) by age and central year of
birth, UK
Rate of lung cancer mortality for females in
England Wales by year of birth
Age group
Sources O.N.S. Lee et al (1993)
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Impact of year of birth in a model of heart
disease mortality change for males in the
population of EW
The UK cohort effect
Source own calculations using O.N.S. figures
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Impact of year of birth in a model of mortality
change for males in the population of EW
The UK cohort effect
Source own calculations using O.N.S. figures
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Impact of year of birth in a model of mortality
change for males in the population of England
Wales
The UK cohort effect
Second cohort due to a wider range of factors
First cohort largely due to trends in smoking
Source own calculations using O.N.S. figures
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Research in other fields
The UK cohort effect

• Researchers in a range of disciplines believe
  that people born in different generations are
  likely to experience different health
  characteristics in later life
• In epidemiology a life course approach to
  understanding disease trends has developed

a degree of anticipation is possible within
lifetimesthrough those things which make an
imprint on life at one point, and which are
carried forward on into later life.
Professor Michael Wadsworth (1991)
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Possible causes of the UK cohort effect
The UK cohort effect

• Patterns of cigarette consumption
• World War II
• Birth rates
• Diet
• Welfare State

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The ageing of mortality improvement
The ages experiencing the most rapid change have
shifted upwards
Source own calculations using O.N.S. data for
males in England Wales
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The ageing of mortality improvement
The ages experiencing the most rapid change have
shifted upwards
Source own calculations using O.N.S. data for
males in England Wales
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Trends in cigarette consumption
Cigarette smoking

• Consumption of cigarettes in the UK has been
  falling since the 1960s
• Smoking prevalence rates stabilised in the 1990s
• The impact on mortality trends is difficult to
  quantify because of the enduring nature of the
  damage caused by cigarette smoking
• Smoking patterns have certainly contributed
  towards the cohort effect
• Reduction in cigarette smoking may account for a
  half to a third of recent improvements at some
  ages

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Increased uncertainty at younger ages
Uncertainty at younger ages

• In the 1980s and 1990s improvements in
  health-related causes were offset by
  deteriorations in a range of different causes,
  notably-
• AIDS
• Drug alcohol abuse
• Liver disease
• Violent deaths
• Accidental deaths (other than motor vehicle)

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Mortality rates for men aged 20-39 in England
Wales as a of rate in 1989
Uncertainty at younger ages
Together these causes now account for 12 of all
deaths for this age group
Source own calculations using O.N.S. data for
males in England Wales
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Average annual rate of mortality improvement,
males aged 20-39, England Wales, 7 year rolling
averages
Uncertainty at younger ages
Source own calculations using O.N.S. data for
males in England Wales
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Uncertainty at younger ages
Average annual rates of mortality improvement for
the population of England Wales 1977 to 2002
Source own calculations using O.N.S. figures -
improvement rates for all ages between 20 and 89
have been used.
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Differential in life expectancy at age 65 between
manual and non-manual classes, England Wales,
1972-99
Widening socio-economic class differentials
Source own calculations using O.N.S. data for
males in England Wales
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Average annual rate of mortality improvement for
males in the population of England Wales and in
the C.M.I. dataset for males with life assurance
policies, 1961-1999
Widening socio-economic class differentials
Source own calculations using C.M.I.B. O.N.S.
data
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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

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U.K. mortality rates by age relative to an
international average from 23 developed
countries
International experience
Source own calculations using W.H.O. data
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Expectation of life (years) for males at age 65
for selected countries in 2000
International experience
Source own calculations using W.H.O. data
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Pace of mortality improvement for Japanese
females by age and calendar year shaded area
shows where change is most rapid
International experience
Age 85
Age 75
Age 65
Age 55
Source own calculations using data from
www.mortality.org
1960
1970
1980
1990
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Pace of mortality improvement for Japanese
females by age and calendar year shaded area
shows where change is most rapid
International experience
Age 85
Age 75
Age 65
3.5 p.a. improvements at age 55
Age 55
Source own calculations using data from
www.mortality.org
1960
1970
1980
1990
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Pace of mortality improvement for Japanese
females by age and calendar year shaded area
shows where change is most rapid
International experience
Age 85
Age 75
4.5 p.a. improvements at age 65
Age 65
3.5 p.a. improvements at age 55
Age 55
Source own calculations using data from
www.mortality.org
1960
1970
1980
1990
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Pace of mortality improvement for Japanese
females by age and calendar year shaded area
shows where change is most rapid
International experience
Age 85
4.25 p.a. improvements at age 75
Age 75
4.5 p.a. improvements at age 65
Age 65
3.5 p.a. improvements at age 55
Age 55
Source own calculations using data from
www.mortality.org
1960
1970
1980
1990
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Pace of mortality improvement for Japanese
females by age and calendar year shaded area
shows where change is most rapid
International experience
4.0 p.a. improvements at age 85
Age 85
4.25 p.a. improvements at age 75
Age 75
4.5 p.a. improvements at age 65
Age 65
3.5 p.a. improvements at age 55
Age 55
Source own calculations using data from
www.mortality.org
1960
1970
1980
1990
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Ratio of average annual rate of improvement over
last 10 years vs. previous 30 years average
based on 5 countries (USA, England Wales,
France, Germany Japan)
International experience
Source own calculations using data from
www.mortality.org
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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

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The pace of scientific development
Medical advances

• The pace of scientific development appears to be
  accelerating
• A substantial element of current improvements
  are being driven by advances in medicine
• Improvements in heart disease mortality have
  been partially caused by-
• new medication, e.g. beta-blockers statins
• new surgical interventions, e.g. CABG
  angioplasty
• Improvements in cancer mortality have been
  partially caused by-
• advances in treatment
• improvements in detection

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The pace of scientific development
Medical advances

• Will the accelerating pace of medical
  advancement drive accelerating mortality
  improvements?
• Two case studies are considered-
• A polypill to treat cardio-vascular disease
• Research into the ageing process

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A polypill to treat cardiovascular disease
Medical advances

• The most important B.M.J. in 50 years. (?)
• Proposal is for a single pill consisting of low
  doses of six (off-patent) drugs already used to
  treat the risk factors of cardiovascular disease
• a statin to reduce cholesterol
• 3 blood-pressure reducing drugs
• folic acid
• aspirin
• To be given to everyone over the age of 55
• Wald Law (2003) claim it could reduce
  cardiovascular disease by 80
• It has been a controversial proposal but at
  the very least - shows how the role of
  preventative medicine could become more important
  in the future

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The ageing process
Medical advances

• It is generally considered that ageing is a
  by-product of the evolutionary process
• However, gerontologists have differing views on
  the potential of medicine to arrest the ageing
  process
• Some believe that human longevity could be
  extended dramatically in the 21st Century

the possibilities of lengthening life appear
practically unlimited
Regelson (1996)
the only practical limit to human life span is
the limit of human technology
Rose (1996)
the cure for ageingis no longer science
fiction
de Grey (2003)
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Developments in anti-ageing research
Medical advances

• Telomerase
• Enzyme used to make human cells replicate
  indefinitely in vitro
• Gerentogenes
• Genes linked to longevity have been manipulated
  in experiments with animals
• Hormone Therapies
• Hormones such as D.H.E.A. have been linked to
  ageing
• Caloric restriction
• Animal experimentation has shown a link between
  a diet low in calories and increased lifespan.
  An ingredient of red wine resveratol seems to
  mimic the age-enhancing effects of caloric
  restriction.

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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

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Infectious diseases are a growing threat
Infectious diseases

• Rapid global transport, especially air travel
  (e.g. SARS)
• Increasing use of antibacterials in medicine
  veterinary science
• Potential advances in xenotransplantation
• Increasing industrialisation of food production
• Human behaviour (unprotected sex and drug use)
• Potential threat of bioterrorism

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Examples of newly-recognised infectious diseases
Infectious diseases
Year Microbe Disease
1977 Ebola virus Ebola haemmorrhagic fever
1977 Legionella pneumophilia Legionnaires disease
1983 HIV AIDS
1996 TSE causing agent New variant CJD
2003 SARS-CoV SARS
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Newly reported HIV infections and HIV-related
deaths in the UK, 1987-2002
Infectious diseases
Source PHLS, HPA
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Reported cases of MRSA in the UK, 1992-2002
Infectious diseases
Source HPA
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General points
Infectious diseases

• Advances in medicine and international
  networking will continue to help limit the
  effects of new diseases (SARS is a good example)
• Arguably HIV is the only infectious agent to
  emerge in recent decades to have a dramatic
  impact on global mortality.
• HIV remains a threat to health and mortality as
  well as the global economy
• The potential threat of infectious diseases
  cannot be disregarded
• As deaths from heart disease and cancer reduce
  in future decades the relative impact of deaths
  from infectious diseases may become more
  significant

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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

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In the first few decades of the 21st Century it
is likely that mortality rates for elderly people
in the UK will improve at faster pace than ever
before
Projecting the future

• Projection of the UK cohort effect
• Past patterns of smoking prevalence
• A general ageing of mortality improvement
• Accelerating medical advances
• Rapid improvements in heart disease mortality
• Potential for improvement at older ages is
  greatest

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Methods of mortality projection
Projecting the future
There will be a much greater focus on quantifying
the uncertainty around future projections
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Significance of mortality assumptions
Projecting the future
Annuity costs for a male retiring at age 65 in
2004 derived using a 5.0 interest rate
Mortality basis Cost relative to PMA92u2004
PMA92u2004 the FSA pension projection basis -
PMA92mc the medium cohort basis 8
Benchmark A based on the assumption that improvements continue at their current pace 13
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Significance of mortality assumptions
Projecting the future
Pension costs for a male retiring at age 65 in
2019 derived using a 2.5 interest rate
Mortality basis Cost relative to PA(90)-2
PA(90)-2 the Minimum Funding Requirement basis -
PMA92c2020 21
PMA92mc the medium cohort basis 34
Benchmark A based on the assumption that improvements continue at their current pace 49
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Longevity in the 21st Century

• Background
• 20th Century Trends
• International Experience
• Medical Advances
• The Threat From Infectious Diseases
• Projecting the Future
• Implications

66
General
Implications

• Likely future trends in mortality will have a
  profound impact on all aspects of our society
• Inevitably people will remain in work for longer

Ten years ago, global ageing barely registered
as a policy issue. Today it is the focus of
growing concern among political and policy
leaders worldwide.
Center for Strategic and International Studies
(2003)
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For life assurance companies
Implications

• Losses being declared on existing annuity books
• Increased reserves for GAOs
• Increased capital requirements (partially driven
  by new FSA regulations)
• Increased focus on mortality issues from equity
  analysts and ratings agencies
• Development of alternative annuity products and
  use of additional rating factors

Taken together these factors may lead to the
continued worsening of annuity rates
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For final salary pension schemes
Implications

• Increasing pressure (not least from equity
  analysts) to disclose mortality assumptions
• Pressure to move towards more flexible
  definitions of retirement age
• Increased buyout costs as closed schemes mature
  and FSA regulations require insurers to consider
  a greater range of adverse scenarios in setting
  capital requirements

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For the Actuarial Profession
Implications

• Increasing realisation that we have much to
  learn from demographers, epidemiologists,
  gerontologists, etc
• Increasing realisation that we need to play our
  part in the wider debate

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Longevity in the 21st Century

• Richard Willets