1. Longevity in the 21 st Century Richard Willets

2. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

3. Longevity in the 21 st Century Background 20 th 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

5. Background The paper “Longevity in the 21 st 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

6. 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

7. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

8. 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 20 th Century Trends

9. Source: own calculations using O.N.S. data 20% fall between 1901 & 1969 (68 years) 20% fall between 1969 & 1986 (17 years) Reduction in the mortality rate for males aged 65-74 in the England & Wales population since 1901 20 th Century Trends

10. Source: own calculations using O.N.S. data 20% fall between 1901 & 1969 (68 years) 20% fall between 1969 & 1986 (17 years) 20% fall between 1986 & 1996 (10 years) Reduction in the mortality rate for males aged 65-74 in the England & Wales population since 1901 20 th Century Trends

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

12. At the beginning of the 21 st Century we are observing accelerating rates of improvement at older ages 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 20 th Century Trends Note: “mortality improvement” is taken to mean the % reduction in mortality rate

13. At the beginning of the 21 st 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 20 th Century Trends Note: “mortality improvement” is taken to mean the % reduction in mortality rate

14. Heart disease mortality is falling sharply Heart disease deaths per 1,000,000 – males aged 60-69 in England & Wales Source: own calculations using O.N.S. data “Premature death from heart disease in England could be almost unheard of within a decade” 20 th Century Trends

15. Mortality rates are falling in other causes Deaths per 1,000,000 – males aged 60-69 in Eng & Wales Source: own calculations using O.N.S. data CancerStroke 20 th Century Trends

16. 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

17. 20 th 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

18. Rate of mortality improvement by age group and decade – females in England & Wales Source: own calculations using O.N.S. figures The UK “cohort effect”

19. Rate of mortality improvement by age group and decade – females in England & Wales Source: own calculations using O.N.S. figures The UK “cohort effect” the “cohort effect”

20. Rate of mortality improvement by age group and decade – males in England & Wales Source: own calculations using O.N.S. figures the “cohort effect” The UK “cohort effect”

21. 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) The UK “cohort effect”

22. Impact of year of birth in a model of mortality change for males in the population of England & Wales Source: own calculations using O.N.S. figures The UK “cohort effect”

23. Impact of year of birth in a model of lung cancer mortality change for males in the population of E&W Source: own calculations using O.N.S. figures The UK “cohort effect”

24. 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 The UK “cohort effect”

25. Impact of year of birth in a model of heart disease mortality change for males in the population of E&W Source: own calculations using O.N.S. figures The UK “cohort effect”

26. Impact of year of birth in a model of mortality change for males in the population of E&W Source: own calculations using O.N.S. figures The UK “cohort effect”

27. Impact of year of birth in a model of mortality change for males in the population of England & Wales Source: own calculations using O.N.S. figures First cohort largely due to trends in smoking Second cohort due to a wider range of factors The UK “cohort effect”

28. 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) The UK “cohort effect”

29. Possible causes of the UK “cohort effect” Patterns of cigarette consumption World War II Birth rates Diet Welfare State The UK “cohort effect”

30. The ages experiencing the most rapid change have shifted upwards Source: own calculations using O.N.S. data for males in England & Wales The ageing of mortality improvement

31. The ages experiencing the most rapid change have shifted upwards Source: own calculations using O.N.S. data for males in England & Wales The ageing of mortality improvement

32. 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

33. 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

34. Mortality rates for men aged 20-39 in England & Wales as a % of rate in 1989 Uncertainty at younger ages Source: own calculations using O.N.S. data for males in England & Wales Together these causes now account for 12% of all deaths for this age group

35. 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

36. 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. Uncertainty at younger ages

37. 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

38. 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

39. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

40. 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

41. Expectation of life (years) for males at age 65 for selected countries in 2000 International experience Source: own calculations using W.H.O. data

42. Pace of mortality improvement for Japanese females by age and calendar year – shaded area shows where change is most rapid International experience Source: own calculations using data from www.mortality.org Age 55 Age 65 Age 75 Age 85 1960197019801990

43. Pace of mortality improvement for Japanese females by age and calendar year – shaded area shows where change is most rapid International experience Source: own calculations using data from www.mortality.org Age 55 Age 65 Age 75 Age 85 1960197019801990 3.5% p.a. improvements at age 55

44. Pace of mortality improvement for Japanese females by age and calendar year – shaded area shows where change is most rapid International experience Source: own calculations using data from www.mortality.org Age 55 Age 65 Age 75 Age 85 1960197019801990 3.5% p.a. improvements at age 55 4.5% p.a. improvements at age 65

45. Pace of mortality improvement for Japanese females by age and calendar year – shaded area shows where change is most rapid International experience Source: own calculations using data from www.mortality.org Age 55 Age 65 Age 75 Age 85 1960197019801990 3.5% p.a. improvements at age 55 4.5% p.a. improvements at age 65 4.25% p.a. improvements at age 75

46. Pace of mortality improvement for Japanese females by age and calendar year – shaded area shows where change is most rapid International experience Source: own calculations using data from www.mortality.org Age 55 Age 65 Age 75 Age 85 1960197019801990 3.5% p.a. improvements at age 55 4.5% p.a. improvements at age 65 4.25% p.a. improvements at age 75 4.0% p.a. improvements at age 85

47. 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

48. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

49. 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

50. 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

51. 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

52. 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 21 st 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)

53. 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

54. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

55. 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

56. Examples of newly-recognised infectious diseases Infectious diseases YearMicrobeDisease 1977Ebola virusEbola haemmorrhagic fever 1977Legionella pneumophilia Legionnaires disease 1983HIVAIDS 1996TSE causing agentNew variant CJD 2003SARS-CoVSARS

57. Newly reported HIV infections and HIV-related deaths in the UK, 1987-2002 Infectious diseases Source: PHLS, HPA

58. Reported cases of MRSA in the UK, 1992-2002 Infectious diseases Source: HPA

59. 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

60. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

61. In the first few decades of the 21 st 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

62. Methods of mortality projection Projecting the future There will be a much greater focus on quantifying the uncertainty around future projections

63. Significance of mortality assumptions Projecting the future Mortality basisCost 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

64. Significance of mortality assumptions Projecting the future Mortality basisCost relative to PA(90)-2 PA(90)-2 [the Minimum Funding Requirement basis] - PMA92c202021% 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

65. Longevity in the 21 st Century Background 20 th Century Trends International Experience Medical Advances The Threat From Infectious Diseases Projecting the Future Implications

66. 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)

67. 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

68. 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

69. 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

70. Longevity in the 21 st Century Richard Willets