Longer lives — impact of medical advances on life expectancy
Several advances in medicine are leading to longer lives, changing mortality expectations and creating new insurance opportunities.
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Global average life expectancy has increased by almost 23 years over the past 60 years. Between 1955–60 to 2015–20, life expectancy at birth increased from 49.4 to 72.3 years, an average annual gain of 0.5% (or 3.7 months) per person per year. If the demographic trends of the last 20 years persist, the 21st century will be one of population ageing. The number of older persons, in absolute terms and as a share of the world’s population, will continue to rise. The expectation is that by 2050, one in six people in the world will be over the age of 65, compared with 1 in 11 in 2019. The number of over-65s globally is forecast to rise from 0.7 billion in 2019 to 1.5 billion in 2050, an increase of 120%.1
Extending lifespans
Longer life expectancy results from improvements in infant mortality rates and overall health conditions for society at large, including better understanding of underlying risk factors like genetics, lifestyle impacts, modifications to lifestyle behaviours and improvements in access to healthcare.
Medical progress continues, with new therapies for illnesses such as Alzheimer’s 2 and osteoporosis3, which impact older generations most. In addition, developments triggered by interest in body enhancements, anti-ageing and life extension treatments advocated by transhumanism are gaining more attention.4 However, as people age, they are also more vulnerable to comorbidities that can span a broad range, including musculoskeletal ailments (eg, osteoarthritis) dementia, pulmonary disease and diabetes.
Financing longer lives
Age-related and chronic illnesses comprise a large part of today’s healthcare provisions in developed markets. Episodic hospital and speciality care at the end of life often dominate as cost drivers in developed health systems. This has triggered increased need for public funding/support of healthcare in many markets. Rising costs of healthcare can also translate into higher premiums for associated insurance covers.5
For life insurance, modelling for old age will become more challenging as medical innovations alter life expectancies. This will have knock-on effects on longevity solutions. For instance, L&H insurance services may also include options to finance care for the elderly in their own homes rather than in hospitals or other institutional care settings.6
The development of new treatments for poor health in old age will continue, too. Given their typically more fragile constitutions, the elderly can be more vulnerable than other age groups to sustain adverse reaction to new medicines or treatments. This raises the potential for product liability and medical malpractice claims, to which casualty insurers would be most exposed.
References
References
1 “Health sector challenges and policies in the context of ageing populations *”, UN’s Department of Economic and Social Affairs, November 2021.
2 “FDA Grants Accelerated Approval for Alzheimer’s Disease Treatment”, 6 January 2023.
3 “FDA approves new treatment for osteoporosis in postmenopausal women at high risk of fracture”, 9 April 2019.
4 Renée Mirkes, “Transhumanist Medicine: Can We Direct Its Power to the Service of Human Dignity?”, National Institute of Health, 29 March 2019.
5 World Health Organization Ageing and health (who.int)
6 “New Care Models: How insurers can rise to the challenge of older and sicker societies”, The Geneva Association, 18 August 2021.