Tag: life insurance

Categories : AgeingTags :

Humans are Approaching a Hard Limit in Life Expectancy Gains

On By ModernMedia
Photo by Matteo Vistocco on Unsplash

Life expectancy increased dramatically over the 19th and 20th centuries, thanks to improvements such as healthier diets and medical advances. But after nearly doubling over the course of the 20th century, the rate of increase has slowed considerably in the last three decades, according to a new study led by the University of Illinois Chicago.

Despite frequent breakthroughs in medicine and public health, life expectancy at birth in the world’s longest-living populations has increased only an average of six and a half years since 1990, the analysis found. That rate of improvement falls far short of some scientists’ expectations that life expectancy would increase at an accelerated pace in this century and that most people born today will live past 100 years.

The Nature Aging paper offers new evidence that humans are approaching a biologically based limit to life. The biggest boosts to longevity have already occurred through successful efforts to combat disease, said lead author S. Jay Olshansky of the UIC School of Public Health. That leaves the damaging effects of aging as the main obstacle to further extension.

“Most people alive today at older ages are living on time that was manufactured by medicine,” said Olshansky, a professor of epidemiology and biostatistics. “But these medical Band-Aids are producing fewer years of life even though they’re occurring at an accelerated pace, implying that the period of rapid increases in life expectancy is now documented to be over.”

That also means extending life expectancy even more by reducing disease could be harmful, if those additional years aren’t healthy years, Olshansky added. “We should now shift our focus to efforts that slow aging and extend healthspan,” he said. Healthspan is a relatively new metric that measures the number of years a person is healthy, not just alive.

Life expectancy increased rapidly through the 19th century and first half of the 20th century. In 1990, some scientists predicted those rapid gains would continue, leading to “radical life extension.” But a new analysis proposes that we may be nearing the limit of human longevity. (Strategic Marketing and Communications / UIC)

The analysis, conducted with researchers from the University of Hawaii, Harvard and UCLA, is the latest chapter in a three-decade debate over the potential limits of human longevity.

In 1990, Olshansky published a paper in Science that argued humans were approaching a ceiling for life expectancy of around 85 years of age and that the most significant gains had already been made. Others predicted that advances in medicine and public health would accelerate 20th-century trends upward into the 21st century.

Thirty-four years later, the evidence reported in the 2024 Nature Aging study supports the idea that life expectancy gains will continue to slow as more people become exposed to the detrimental and immutable effects of aging. The study looked at data from the eight longest-living countries and Hong Kong, as well as the United States – one of only a handful of countries that has seen a decrease in life expectancy in the period studied.

“Our result overturns the conventional wisdom that the natural longevity endowment for our species is somewhere on the horizon ahead of us – a life expectancy beyond where we are today,” Olshansky said. “Instead, it’s behind us – somewhere in the 30- to 60-year range. We’ve now proven that modern medicine is yielding incrementally smaller improvements in longevity even though medical advances are occurring at breakneck speed.”

While more people may reach 100 years and beyond in this century, those cases will remain outliers that won’t move average life expectancy significantly higher, Olshansky said.

That conclusion pushes back against products and industries, such as insurance and wealth-management businesses, which increasingly make calculations based on assumptions that most people will live to be 100.

“This is profoundly bad advice because only a small percentage of the population will live that long in this century,” Olshansky said. 

But the finding doesn’t rule out that medicine and science can produce further benefits, he said. There may be more immediate potential in improving quality of life at older ages instead of extending life, the authors argue. More investment should be made in geroscience – the biology of aging, which may hold the seeds of the next wave of health and life extension.

“This is a glass ceiling, not a brick wall,” Olshansky said. “There’s plenty of room for improvement: for reducing risk factors, working to eliminate disparities and encouraging people to adopt healthier lifestyles – all of which can enable people to live longer and healthier. We can push through this glass health and longevity ceiling with geroscience and efforts to slow the effects of aging.”

Source: University of Illinois Chicago

Categories : Medical IndustryTags :

Storm on the Horizon for Life Insurance: Rising Prices and Long COVID

On By ModernMedia
Business data
Photo by Towfiqu barbhuiya on Unsplash

Coming out of 2021, Price Waterhouse-Cooper analysed major life insurers in a new report, and found that they were able to maintain their policy holder obligations and maintain their financial positions. However, uncertainty is growing as global commodity prices spike amid lackluster growth and COVID’s potential long-term impacts.

PwC analysed 2021 results for five major insurers:  Discovery, Liberty, Momentum Metropolitan Holdings Limited (MMH), Old Mutual, and Sanlam.

 Alsue du Preez, PwC Africa Insurance Leader, said that the results are presented in the context of rapidly changing circumstances in which insurers are conducting their businesses. “Significant shifts are still occurring, the latest being the invasion by Russia of Ukraine and flooding in KZN, impacting not only the economy but environmental and social conditions,” she said. “These factors, as well as ongoing shifts in customer expectations and needs, have the potential to continue to materially influence future performance.”

While the COVID pandemic in 2020 was unpredictable, the impact of the second and third waves in 2021 was underestimated by life insurers, the report noted. The year 2021 did however come with a realisation of just how complicated the variables are, bringing risk variance losses of R6.8bn.

Key indicators showed that profitability growth was subdued even pre-pandemic, with earnings growing in line with inflation. Value of New Business (VNB) margins – ie, profit from new policy signings – was trending downwards slightly. VNB was 2.7%–3.1% over the period 2011–2015 but decreased to 2.4% in 2018 and 2019. The VNB margin achieved in 2021 is lower still at 1.9%, but still an improvement from 2020’s result of 1.49%.

The present value of new business premiums (PVNBP), which is the present value of total confirmed premiums that will be received from present to future, increased by 13% from 2019, but this could not offset the fall in margins compared with pre-pandemic levels. 

The report paints a grim picture for economic growth. Stifled GDP growth – with a per capita GDO fall of 4.2% – has been compounded by Russia’s invasion of Ukraine, with supply chain disruptions and knock-on global price increases. 

“Given the consequent higher inflation, weaker external demand and an unreliable power supply (the country’s largest growth inhibitor), we now forecast a real GDP growth rate of 2.0% this year (from 2.3% previously) with continued downside risk,” du Preez said. “Alongside this, weaker economic outlook provides even greater concern about the speed of the country’s jobs recovery. There is little scope for South Africa’s unemployment rate to improve this year if local business sentiment is weighed down by these factors.” 

Pressure on low/medium income households will impact their ability to afford new or existing insurance products

Increasing living costs will adversely impact all households during 2022, though this will impact the various income groups differently. 

“Middle to higher income groups are re-evaluating their discretionary spending patterns and are either ‘buying down’ or reducing insurance and savings products,” du Preez said. “On the other hand, households in the lower to lower-middle income categories will struggle to sustain their monthly basket of goods purchases. Given increased costs of necessities, these households will need to carefully consider the affordability of other discretionary monthly expenses, including insurance products.”

More than half of the income of low-income households goes on food and non-alcoholic beverages, which will be impacted by increasing commodity prices.

As we now proceed out of the rollercoaster that was 2021, a fair amount of uncertainty lingers in the industry. Talk is now moving more towards whether cost savings insurance entities achieved during the lockdown will be sustainable, as well as what allowance should be made for COVID’s impacts on long term mortality and long-COVID. 

Moving out of the rollercoaster of 2021, there is still significant uncertainty in the industry, with discussion over whether insurance companies will sustain their cost savings made during lockdown. Another question is how COVID will impact the industry in terms of mortality and long COVID.

The major life insurers’ Stronger performances in FY21 showed sustained strength in operational and capital management, and the relative benefits of diversification amongst their business portfolios. “The post-COVID financial ‘recovery’ is pleasing to see, but the pre-COVID comparison, coupled with the difficult macro-economic backdrop into the medium term, demonstrates the need for insurers to continue to innovate and invest on multiple fronts,” du Preez said. 

Categories : COVID Medical IndustryTags :

Life Insurance Premium Hike on the Cards for the Unvaccinated

On By ModernMedia
Coffin in hearse at a funeral
Photo by adrianna geo on Unsplash

After a staggering increase of R24.9 billion in claims from COVID, South African life insurers are faced with little option but to implement a premium hike on policies for the unvaccinated. Death rates among unvaccinated people could remain elevated even as the pandemic eases, despite the lower severity of Omicron.

The Association for Savings and Investment SA (Asisa) provided death claims data from 1 April 2021 to 30 September 2021, a period which covered the third COVID wave (May to September). Compared to the same pre-pandemic period in 2019, there was a 53% surge in claims was reported, with a more than doubling of value of death claims. There were 565 522 claims, totalling R44.42 billion, compared to the pre-pandemic period’s 369 892 claims of R19.53 billion.

Though deaths were greatly reduced in the fourth wave, with Asisa acknowledging “anecdotal evidence” showing reduced severity from the Omicron variant, there was still “overwhelming evidence” that COVID mortality risks are far higher for the unvaccinated. Asisa’s data reflects that of the South African Medical Research Council (SAMRC), which shows a huge increase in the number of excess deaths over that period.

This information comes as the government debates easing lockdown measures even as various institutions warn of an impending fifth wave, which according to Absa bank could come as early as next month. However, Absa noted that its life claims were much reduced over the fourth wave as compared to the third, and therefore expects the fifth wave to be less severe.

Hennie de Villiers, the deputy chair of Asisa’s life and risk board committee, said that the importance of life insurance cover had been clearly demonstrated. “The reality is that most of us know at least one person who lost his or her life due to COVID. We also know of many more people who lost their income during the pandemic, highlighting the importance of having access to savings.”

He cautioned that, “While the death rate has been lower during the fourth wave than in previous waves due to vaccinations and the emergence of the Omicron variant, death claims rates have not yet returned to pre-pandemic levels. Also, less than 50% of our adult population has been vaccinated.

“There is overwhelming evidence that the risk of severe illness or death is significantly lower in those who are fully vaccinated.”

He added in a later statement that if the situation does not change and vaccinations are not embraced by the country, insurers may have “little choice but to adjust premiums in line with the higher risk presented by someone who is not vaccinated and therefore more likely to die from COVID”.

De Villiers said a “staggering” 1.59-million death claims were received in the 18 months from 1 April 2020 to 30 September, with life insurers paying out benefits of R92 billion.

Group life insurance premiums have already increased for the unvaccinated, De Villiers pointed out. Employers with mandatory vaccination policies are meanwhile benefitting from preferential rates.

When unvaccinated status is combined with age and comorbidities, premium increases, this resulted in premium increases of as much as 100% and in some cases coverage was even declined.

Source: Business Live