The future of life expectancy

Human longevity is one of the great success stories of the past century, and there is broad consensus that there are further gains to come. Mortality improvement forecasts underpin the insurance industry's long-term mortality and longevity lines of business. To generate long term forecasts, defined as beyond 20 years, a holistic view of the factors that influence mortality, which combine analyses of historic trends with a forward-looking view of medical advances, societal changes and technological developments, is considered a better predictor than historical trends alone.

Life expectancy typically improves in waves as innovations in medicine, healthcare and lifestyles sweep through countries at different times and rates. For most of modern history, this has been a cyclical process, resulting in periods of high annual increases in mortality improvement followed by periods with very little improvement each year, creating a consistently positive trajectory for lifespans.

The last large wave of high improvement in life expectancies, driven largely by improved diagnosis and treatment of cardiovascular diseases (CVD) and cessation of smoking, ended in about 2010. Since then, population mortality improvement has slowed or plateaued in many advanced markets.

Identifying the factors that may produce the next major wave of mortality improvement is important to insurers, to support actuarial assumption setting for both pricing and valuation, and risk management.

The largest positive impact is likely to come from advanced cancer diagnostics and the evolution of treatments from generic to personalised, precision medicine. With fewer opportunities left to revolutionise cardiovascular medicine, decreases in deaths from these diseases are likely to come from improvements in lifestyle and behavioural risk factors.

As societies age, neurodegenerative and ageing diseases will incrementally become a more significant cause of death than in the past. Medical solutions for Alzheimer's disease and dementia are essential to deliver sustained mortality improvement since most therapies today typically offer only symptomatic relief, but while the potential is vast, this remains largely uncharted territory.

Given the exciting prospect of advancements in medicine and healthcare, we see the potential for global average life expectancy to reach new milestones in the coming decades. However, lifestyle factors, particularly rising rates of obesity and diabetes due to poor diet and sedentary behaviour, could put future gains at risk. Policy interventions will be key. Innovations in weight loss drugs and surgery may also offer some emerging solutions and we anticipate a small positive impact on mortality trends on the current development path.

In recent years, we note a divergence in mortality trends by socioeconomic status, notably in the US. While premature death rates for lower socioeconomic groups have historically been higher, the continued divergence in mortality trends is concerning as it implies a growing gap in health and death rates.

As the recent experience of COVID-19 shows, insurers should continue to monitor emerging risks. Future threats could come from known risks such as climate change, or a disease or development yet unknown. We live in a world of increasing uncertainty and connected extremes. While we see many reasons to be bullish about mortality gains in the long term, risk management, and reinsurance as a part of it, can play a key role in helping insurers to navigate volatility.