The Actuarial Profession today announced its adoption of new mortality tables (see Note 1). The tables were produced by the Continuous Mortality Investigation (CMI) (see Note 2.), a research organisation of the Actuarial Profession. The tables were published in draft form in 2005 (see Note 3.) and minor adjustments were incorporated in the final version to reflect feedback received from actuaries.
Previous sets of tables have incorporated projections of future mortality, but this has not been done with the latest tables because of the uncertainty surrounding future improvements. The CMI has been undertaking significant research into possible methods of projecting mortality. This research is continuing, but it is not currently expected that this work will lead to adoption of a specific projection basis by the Actuarial Profession. Instead the profession is saying that actuaries – and other professionals using mortality projections – should consider a range of scenarios.
There are important financial implications of any improvement in mortality. For pensioners, improved mortality rates (see Note 4.) mean spending longer in retirement and the latest tables show why many commentators have been calling for retirement ages to increase.
Nick Dumbreck, President of the Institute of Actuaries, commented: “Actuaries have always been expected to satisfy themselves that using a mortality table published by the profession is appropriate for the particular purpose to which it is put and this is no different with the latest tables. However the absence of mortality projections in these tables emphasises the need for actuaries to consider the uncertainty surrounding future mortality experience and to explain the financial repercussions of this uncertainty to their employers and clients.”
Pension funds that provide guaranteed benefits until death are in worse financial shape than they know. As the rate of increase in life expectancies starts to accelerate will governments eventually step in with legal changes to relieve the pension funds of some of their liabilties?
The actuaries show a table of dramatic improvements in the odds of dying at ages 65, 75, and 85. The series "92" represents measured death rates in 1991-1994 and the later series "00" represents death rates during 1999-2002.
The following information is repeated from the Press Release of September 2005. Mortality rates are the probability of dying at a given age. Specimen mortality rates (per 1,000) from the new tables (the "00" Series) and the previous tables (the "92" Series) and the implied improvements are shown in the table below:
Males Females Age "00" series "92" series Improvement "00" Series "92 Series" Improvement 65 12.85 18.12 29% 7.41 10.98 33% 75 40.82 54.20 25% 26.42 34.61 24% 85 111.52 131.07 15% 82.48 91.88 10%
The figures quoted are for pensioners insured under life office pension schemes (ie, not individual annuity-type arrangements) who retire at or after normal retirement dates (ie, excluding early retirements, who may be retiring due to ill-health).
Stem cell therapies for heart disease, drugs to stop Alzheimer's plaque build-up, immunotherapies against cancer, and many other coming treatments are going to cause big surges in longevity. Actuaries have no way of knowing when these treatments will come. But they are already seeing big enough changes in longevity to doubt their abilities to predict future life expectancies. The rate of advance for biomedical science and biotechnology is accelerating.
Aubrey de Grey has coined the term ‘actuarial escape velocity’ (AEV) which is the point at which life expectancy goes up faster than 1 year per year. Once we reach AEV your odds of dying in a given year will become less than your odds of dying in the previous year. Aubrey thinks AEV is within reach within a few decades.
The escape velocity cusp is closer than you might guess. Since we are already so long lived, even a 30% increase in healthy life span will give the first beneficiaries of rejuvenation therapies another 20 years—an eternity in science—to benefit from second-generation therapies that would give another 30%, and so on ad infinitum. Thus, if first-generation rejuvenation therapies were universally available and this progress in developing rejuvenation therapy could be indefinitely maintained, these advances would put us beyond AEV.
I share his optimism because I see advances in biotechnology of sorts that mirror the kinds of advances that occur in electronics. Microfluidics devices built using processes similar to those used to build semiconductor computer chips in particular promise to make laboratory science orders of magnitude faster and cheaper. Therefore many biomedical problems will become easily solvable. These advances in biotechnology will enable us to develop the full range of Strategies for Engineered Negligible Senescence (SENS) and eventually to reverse the aging process.
|Share |||Randall Parker, 2006 August 05 10:05 PM Aging Trends|