A scheme guide to changing longevity risk

Unlike in many areas of technology, advances in biomedical sciences take much longer to move from discovery stage to mass adoption.

As a result, some of the advances made over the past two decades may only soon be reaching the clinical practice, advances that could result in unexpected longevity increases for the retired and retiring population.

With this in mind, pension funds and insurance companies must stay vigilant of these new developments, adjusting their policies to hedge against extreme longevity risks while also taking a more proactive role in supporting research that leads to productive longevity and an increase in retirement age.

The longevity dividend

According to the International Aging Research Portfolio the governments of the US, Canada, Australia and the EU have spent more than $700bn (£421bn) on biomedical research since 1994, with the US’s National Institutes of Health spending more than $33bn annually.

In 2011, China also announced a five-year plan to spend $309bn on research and infrastructure in biomedicine.

Government spending, however, only accounts for 40-60 per cent of the total spending on biopharmaceutical research and development, with the 10 largest pharmaceutical companies also collectively spending more than $68bn in 2013 alone.

While a small percentage of this global spending may translate into significant longevity dividends, some discoveries along with convergence of other technologies are expected to significantly reduce mortality.
We are already seeing significant decreases in mortality due to the use of advanced diagnostic technologies, new cardiovascular drugs, targeted anti-cancer therapies and anti-infectives.



Advances in science and technology

The most promising areas of biotechnology that will certainly result in mortality decreases are molecular and genetic diagnostics, biosensors, regenerative medicine technologies, personalised medicine, gene therapy and medical implants.

While the progress may be slowed by regulatory barriers and the need for lengthy clinical validation, these new therapeutic technologies are still reaching the market.

Take RNA interference technology, first published in 1998, which allows specific genes to be silenced. This technology resulted in a 2006 Nobel Prize for both Andrew Fire and Craig Mello and is already close to clinic, attracting interest from investors and pharmaceutical companies.

Alnylam, a company specialising in RNA interference technologies, was only incorporated in 2002, yet its market capitalisation has already exceeded $5bn and it employs 165 people.

The progress in regenerative medicine is even more apparent, with more than 2,000 companies and research institutions contributing to research, and stem cell products already being used in the clinic.