longevity in the 21 st century

Longevity in the 21st Century

Richard Willets


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

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

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

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

Source: own calculations using O.N.S. data

• 20% fall between 1901 & 1969 (68 years)

Reduction in the mortality rate for males aged 65-74 in the England & Wales population since 1901

20th Century Trends


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


20th Century Trends


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


20th Century Trends


• 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)


20th Century Trends

At the beginning of the 21st Century we are observing accelerating rates of improvement

at older ages

Age group 1990 to 1994 1994 to 1998 1998 to 200260-69 3.0% 3.2% 3.9%70-79 1.8% 2.3% 3.7%80-89 1.1% 1.2% 2.5%

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

20th Century Trends

Note: “mortality improvement” is taken to mean the % reduction in mortality rate

At the beginning of the 21st Century we are observing accelerating rates of improvement

at older ages

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

20th Century Trends

Age group 1990 to 1994 1994 to 1998 1998 to 200260-69 2.4% 2.5% 3.1%70-79 1.0% 1.0% 3.0%80-89 0.8% 0.4% 1.7%

Note: “mortality improvement” is taken to mean the % reduction in mortality rate

Heart disease mortality is falling sharply

0

2,000

4,000

6,000

8,000

10,000

12,000

1960 1970 1980 1990 2000

Heart disease deaths per 1,000,000 – males aged 60-69 in England & Wales

Period Reduction1960-1970 -5%1970-1980 -1%1980-1990 20%1990-2000 45%


“ Premature death from heart disease in England could be almost unheard of within a decade”

20th Century Trends

Mortality rates are falling in other causes

Deaths per 1,000,000 – males aged 60-69 in Eng & Wales


Cancer

6,000

7,000

8,000

9,000

10,000

1970 1980 1990 20000

1,000

2,000

3,000

4,000

1970 1980 1990 2000

Stroke

20th Century Trends

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

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

Rate of mortality improvement by age group and decade – females in England

& Wales

Source: own calculations using O.N.S. figures

25-2935-39

45-4955-59

65-6975-79

85+

0.0%

1.0%

2.0%

3.0%

4.0%

age group

1960s

1970s

1980s

1990s

The UK “cohort effect”

Rate of mortality improvement by age group and decade – females in England

& Wales


25-2935-39

45-4955-59

65-6975-79

85+

0.0%

1.0%

2.0%

3.0%

4.0%

age group

1960s

1970s

1980s

1990s


the “cohort effect”

Rate of mortality improvement by age group and decade – males in England & Wales


25-2935-39

45-4955-59

65-6975-79

85+

0.0%

1.0%

2.0%

3.0%

4.0%

age group

1960s

1970s

1980s

1990s

the “cohort effect”


Mortality projections

• 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)


Impact of year of birth in a model of mortality change for males in the population of England

& Wales



-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

1900 1910 1920 1930 1940 1950

Year of birth

Addition to average annual

rate of improvement due to year of birth

Impact of year of birth in a model of lung cancer mortality change for males in the

population of E&W


-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

1900 1910 1920 1930 1940 1950

Year of birth




0.0%

0.1%

0.1%

0.2%

0.2%

0.3%

1870 1880 1890 1900 1910 1920 1930 1940 1950

50-54

55-59

60-64

65-69

70-74

75-79

80-84

Rate of lung cancer mortality for females in

England & Wales by year of birth

Female cumulative constant tar cigarette

consumption (CCTCC) by age and central year of

birth, UK

Sources: O.N.S. & Lee et al (1993)

Age group


Impact of year of birth in a model of heart disease mortality change for males in the

population of E&W



-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

1900 1910 1920 1930 1940 1950

Year of birth



Impact of year of birth in a model of mortality change for males in the population of E&W


-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

1900 1910 1920 1930 1940 1950

Year of birth



lung cancer

heart disease


Impact of year of birth in a model of mortality change for males in the population of England

& Wales


First cohort largely due to trends in smoking

Second cohort due to a wider range of factors


-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

1900 1910 1920 1930 1940 1950

Year of birth



Research in other fields• 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 lifetimes…through those things which make an imprint on life at one point, and which are carried forward on into later life.” Professor Michael Wadsworth (1991)


Possible causes of the UK “cohort effect”

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


The ages experiencing the most rapid change have shifted upwards

20-24 30-3440-44

50-5460-64

70-7480-84

0.0%

1.0%

2.0%

3.0%

4.0%

Rate of mortality

improvement

Age Group

1911-1960

Source: own calculations using O.N.S. data for males in England & Wales

The ageing of mortality improvement

The ages experiencing the most rapid change have shifted upwards

20-24 30-3440-44

50-5460-64

70-7480-84

0.0%

1.0%

2.0%

3.0%

4.0%

Rate of mortality

improvement

Age Group

1911-1960

1960-2001


The ageing of mortality improvement

Trends in cigarette consumption

• 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

Cigarette smoking

Increased 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)

Uncertainty at younger ages

Mortality rates for men aged 20-39 in England & Wales as a % of rate in 1989



100%

150%

200%

250%

300%

350%

400%

450%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

drug & alcohol abuse

liver disease

Together these causes now account for 12% of all deaths for this age

group

Average annual rate of mortality improvement, males aged 20-39, England & Wales, 7 year rolling

averages



-3%

-1%

1%

3%

5%

7%

9%

11%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995

Central year

20-24

25-29

30-34

35-39

Average annual rates of mortality improvement for the population of England & Wales – 1977

to 2002year of birth males females

1900-1924 1.6% 1.1%1925-1947 2.8% 2.4%1948-1970 -0.4% 0.6%

Source: own calculations using O.N.S. figures - improvement rates for all ages between 20 and 89 have been used.


Differential in life expectancy at age 65 between manual and non-manual classes, England & Wales,

1972-99

Widening socio-economic class differentials


0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

1972-76 1977-81 1982-86 1987-91 1992-96 1997-99

Year

Difference between non-manual and

manual (years)

male

female

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

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

40 45 50 55 60 65 70 75 80 85

Age

Rate of improvement (per annum)

England & Wales population

CMI assured lives (smoothed)

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

80%

90%

100%

110%

120%

130%

30 35 40 45 50 55 60 65 70 75 80 85 90 95

Age

males

females

Expectation of life (years) for males at age 65 for selected countries in 2000


Source: own calculations using W.H.O. data

12

13

14

15

16

17

18

Japa

n

Fran

ce

Switz

erla

nd

Aus

tral

ia

Swed

en

Isra

el

New

Zea

land

Ital

y

Spai

n

USA

Can

ada

Sing

apor

e

Gre

ece

Nor

way

Bel

gium

Aus

tria

Den

mar

k

Net

herlan

ds

Finl

and

UK

Ger

man

y

Port

ugal

Irel

and

Pace of mortality

improvement for

Japanese females by

age and calendar

year – shaded area

shows where

change is most rapid


Source: own calculations using data from www.mortality.org

Age 55

Age 65

Age 75

Age 85

1960

1970

1980

1990

Pace of mortality

improvement for

Japanese females by

age and calendar


shows where




Age 55

Age 65

Age 75

Age 85

1960

1970

1980

1990

3.5% p.a. improvements at

age 55

Pace of mortality

improvement for

Japanese females by

age and calendar


shows where




Age 55

Age 65

Age 75

Age 85

1960

1970

1980

1990


age 55


age 65

Pace of mortality

improvement for

Japanese females by

age and calendar


shows where




Age 55

Age 65

Age 75

Age 85

1960

1970

1980

1990


age 55


age 65


age 75

Pace of mortality

improvement for

Japanese females by

age and calendar


shows where




Age 55

Age 65

Age 75

Age 85

1960

1970

1980

1990


age 55


age 65


age 75


age 85

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)



100%

120%

140%

160%

180%

200%

70 75 80 85 90 95 100

Age

Male

Female

The pace of scientific development• 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

Medical advances

The pace of scientific development

• 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

Medical advances

A ‘polypill’ to treat cardiovascular disease

• “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

Medical advances

The ageing process• 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

Medical advances

“ … the possibilities of lengthening life appear practically unlimited”

“ … the only practical limit to human life span is the limit of human technology”

“ … the cure for ageing…is no longer science fiction”

Regelson (1996)

Rose (1996)

de Grey (2003)

Developments in anti-ageing research • 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.

Medical advances

Infectious diseases are a growing threat

• 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

Infectious diseases

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

Newly reported HIV infections and HIV-related deaths in the UK, 1987-2002

Infectious diseases

0

1,000

2,000

3,000

4,000

5,000

6,000

1987 1990 1993 1996 1999 2002

Year

Newly-reportedHIV infections

HIV-related deaths

Source: PHLS, HPA

Reported cases of MRSA in the UK, 1992-2002

Infectious diseases

Source: HPA

0

1,000

2,000

3,000

4,000

5,000

6,000

1992 1995 1998 2001

Year

General points • 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

Infectious diseases

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

• 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

Projecting the future

Methods of mortality projection


There will be a much greater focus on quantifying the uncertainty around future

projections

Significance of mortality assumptions


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%

Annuity costs for a male retiring at age 65 in 2004 derived using a 5.0% interest

rate

Significance of mortality assumptions


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%

Pension costs for a male retiring at age 65 in 2019 derived using a 2.5% interest

rate

General

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

Implications

“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)

For life assurance companies

• 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

Implications

Taken together these factors may lead to the continued worsening of annuity rates

For final salary pension schemes

• 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

Implications

For the Actuarial Profession

• 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

Implications


Richard Willets

longevity in the 21 st century

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