Mortality improvements and Life Expectancy

1
Mortality improvements and Life Expectancy

• OPA 25 October 2007
• Adrian Gallop
• ONS

2
National Population Projections Mortality

• Historical data
• Regional comparisons
• Mortality projection methodology
• Assumptions
• Results from 2006-based population projections
• CMI

3
Period expectation of life at birth, EW
4
Period expectation of life at age 65, EW
5
Proportion of persons surviving to successive
ages, historical or projected mortality, selected
years, EW
6
Average annualised rates of improvement in
standardised EW mortality rates
Source calculations using English Life Tables
and 2003-05 ILT, standardised using 2001 pop ests
7
Effective annual rates of improvement in
mortality, males, EW
Source calculations using English Life Tables
and 2003-05 ILT
8
Effective annual rates of improvement in
mortality, females, EW
Source calculations using English Life Tables
and 2003-05 ILT
9
The cohort effect

• Faster improvements have been observed for the UK
  generation born 1925-1945 centred on 1931
• This feature has been explicitly allowed for in
  GAD mortality projections since the early 1990s
• The CMI (Continuous Mortality Investigation) have
  described a similar effect in insurance and
  pensioner data centred on 1926

10
Annual improvement in smoothed mortality rates,
Males, UK 1961/2 to 2004/5
11
Annual improvement in smoothed mortality rates,
Females, UK 1961/2 to 2004/5
12
Possible causes of the UK cohort effect

• Patterns of cigarette consumption
• World War II
• Birth rates
• Diet
• Welfare State

13
Potential drivers for future mortality change

• Reduced levels of deprivation, better housing etc
  ()
• Govt support for increasing wealth, health and
  incomes ()
• Public support for spending on medical advances
  ()
• Decline in smoking prevalence ()
• Lifestyles ( and -)
• Obesity (-)
• Emergence of new infectious diseases (eg HIV,
  SARS) (-)
• Re-emergence of old diseases (eg TB) (-)
• Increased uncertainty at younger ages (- and )
• Differentials by social class
• Cohort effects
• Wide spread of opinion as to whether future
  technical, medical and environmental changes will
  have greater or lesser impact than in the past

14
Male mortality by major cause, England Wales,
1911-2005
15
Female mortality by major cause, England Wales,
1911-2005
16
Medical advances - The pace of scientific
development

• Pace of scientific development accelerating
• Large element of current improvements driven by
  advances in medicine
• Improvements in heart disease mortality
  partially caused by
• - new medication, e.g. beta-blockers statins
• - new surgical interventions, e.g. angioplasty
• Improvements in cancer mortality partially
  caused by
• - advances in treatment
• - improvements in detection

17
Medical advances v risk factors

• Reduction in EW CHD deaths recent study
  suggests
• 60 due to risk factors,
• 40 due to treatments
• Some risk factors produced small increases
  (increases in diabetes and obesity, less physical
  activity)
• Main risk factor decrease due to smoking,
  followed by chloresterol and lower blood pressure
  levels

18
Smoking Assured lives - Differences in period ex
19
Infectious diseases - a growing threat?

• Rapid global transport, especially air travel
  (e.g. SARS)
• Medical advances eg antibacterials,
  xenotransplantation
• Human behaviour
• Potential threat of bioterrorism
• So far, medical advances and international
  networking limited effects of new diseases (eg
  SARS)
• HIV only infectious agent to emerge in recent
  decades to have a dramatic impact on mortality
• Cannot disregard potential threat of infectious
  diseases
• Relative impact of deaths from infectious
  diseases may become more significant

20
Variations in life expectancy

• Between local authorities and smaller areas
• Social class component of variation
• Between countries in the UK
• Between regions
• Social class trends in life expectancy

21
Life expectancy of males in local authorities in
UK, 2003-5
22
Life expectancy of males in Camden wards
23
Trends in male period life expectancy at birth by
social class, 1972-2001
24
Trends in male period life expectancy at age 65
by social class, 1972-2001
25
Trends in male period life expectancy at age 65
Social classes I and V, 1972-2001
26
Social class differences in male period life
expectancy at age 65, 1972-2001
27
Mortality rates by social class
Source ONS Longitudinal Study
28
Mortality rates - social class I
Source ONS Longitudinal Study
29
Mortality rates - social class II
Source ONS Longitudinal Study
30
EolB Males selected countries
31
EolB Females selected countries
32
Female Male EolB selected countries
33
Period expectations of life at birth in 2005
34
Broad classification of methodologies

• Process-based
• - model mortality rates from a bio-medical
  perspective
• - need to understand processes
• Explanatory-based
• - causal forecasting, e.g. econometric
  techniques
• - need to understand causal links, model
  underlying factors and project over long term
• Extrapolative
• - project historical trends into the future

35
Extrapolative methodologies

• Parametric methods - e.g. fitting parameterised
  curves to past data and projecting these forward
• Targeting approach - interpolating between
  current mortality rates and target rates assumed
  to hold at a given future date
• Trend projection - either deterministic or
  stochastic

36
Projections by cause of death

• Advantages
• provides insights into way mortality is changing
• appears to offer greater accuracy in forecasts
• of interest to those researching specific causes
• Disadvantages
• deaths from specific causes not always
  independent
• difficult to determine actual cause of death
• changes in classification of causes and diagnosis
  practice
• resulting aggregate rates may be implausible
• usually have catch all category where trends
  difficult to project

37
UK Population Mortality Projections

• Estimate current rates of mortality improvement
  by age and gender
• Set target rates of mortality improvement for
  some future year (the target year)
• Make assumptions on method and speed of
  convergence of current improvement rates to
  target rates and how improvement rates change
  after target year

38
UK Population Mortality Projections

• Target year is 25th year of projection
• (ie 2031 for 2006-based projections)
• Target improvements in 2031 assumed to be 1 pa
  for most ages for both males and females
• For those born between 1923 and 1940 target
  improvement rises from 1 pa to 2.5 pa for those
  born in 1931 then declines back to 1
• Applies to UK and constituent countries

39
Evidence for target setting

• Historical data
• Expert opinion
• Trends in cause of death, and changes in medical
  practices
• Results of pure extrapolatory models

40
Choice of target rate

• Rates of improvement at older ages most important
• Standardised average rate of improvement over
  20th century 1.0 pa
• Cohorts exhibiting greatest improvement will be
  aged 85-105 in 2031 so likely to contribute less
  to overall rate of improvement
• Debate as to whether future technical, medical
  and environmental changes will have greater or
  lesser impact than in the past

41
UK Population Mortality Projections

• Current improvements in mortality rates differ by
  age and sex extrapolated from past trends
• Current improvements assumed to converge to 1 pa
  by 2031 for most ages, males and females
• Convergence not linear more rapidly at first for
  males, less rapidly for females
• For those born before 1960, convergence assumed
  along cohort
• After 2031 rates of improvement assumed to remain
  constant at the rate assumed for 2031
• Variants HLE target rate Principal 1
• LLE target rate Principal 1

42
Projected smooth percentage changes in death
rates between 2006 and 2007 by age
UK Male/Female comparison
43
Projected smooth percentage changes in death
rates between 2006 and 2007 by age
UK Male/Female comparison
44
Projected smooth percentage changes in death
rates between 2006 and 2007 by age
UK Male/Female comparison
45
Annual improvement in smoothed mortality rates,
Males, UK
46
Annual improvement in smoothed mortality rates,
Females, UK
47
Actual and assumed overall annual rates of
mortality improvement
Note Analysis relates to England Wales.
Historic estimates are based on comparison of
2003-05 Interim Life Tables with English Life
Tables for 1930-32, 1960-62 and 1980-82
48
Period cohort life expectancy
2007 period and cohort life expectancy at various
ages, United Kingdom
Average number of additional years a person of
age x can expect to live a) according to the
mortality rates for 2007 b) according to
projected mortality rates
49
Period and cohort expectations of life at birth,
United Kingdom
2006-based principal projections
50
Period and cohort expectations of life at age 65,
United Kingdom
2006-based principal projections
51
Projected period expectations of life at birth in
2050

• 2006-based projections
• Source latest published projections from
  countrys national statistics website

52
Period expectation of life at birth, UK
2006-based projections
53
Period expectation of life at age 65, UK

• 2006-based projections

54
Period expectation of life at birth, males, 1981
- 2044
2006-based principal projections
55
Period expectation of life at age 65, males,
1981 - 2044

• 2006-based principal projections

56
Period expectation of life at birth, females,
1981 - 2044
2006-based principal projections
57
Period expectation of life at age 65, females,
1981 - 2044
2006-based principal projections
58
Cohort expectation of life at age 65, males,
1981 - 2044
2006-based principal projections
59
Cohort expectation of life at age 65, females,
1981 - 2044
2006-based principal projections
60
Continuous Mortality Investigation (CMI)

• Carries out research into mortality and morbidity
• Encompasses persons covered by long term risk
  contracts issued by life assurance offices in the
  United Kingdom and the Republic of Ireland.
• Investigations cover all the main types of life
  assurance, annuitant, pensioner, critical illness
  and income protection insurance contracts offered
  by the market.
• The base data is supplied by life offices
  covering the majority of the market.
• All dealings with individual offices are
  confidential.

61
CMI Mortality Tables

• Standard period life tables
• Base tables graduated using data for 4
  consecutive years
• Extrapolated for oldest ages with ad hoc
  adjustments of rates or parameters
• Assured lives
• Select/ultimate
• Smoker/non-smoker
• Pensioners
• Lives/amounts
• For pensioners and annuitants, tables of
  projected mortality rates
• Standard tables (92 tables) have base
  projections and three further variants allowing
  for cohort effects for those born around 1926
  (short, medium and long cohort) based on members
  of insured pension schemes

62
Pensions

• Different mortality bases may be used, on
  actuarial advice
• Valuation funding exercise assuming scheme
  ongoing
• responsibility of trustees prudent scheme
  specific
• Accounting purposes FRS17
• responsibility of directors best estimate
• Buy out costs
• prudent margins
• Costing options
• may have margins to protect scheme
• Similar principles apply to the financing of
  (unfunded) public sector pension schemes

63
Pensions

• In advising on a mortality basis actuaries will
  usually analyse past mortality experience of the
  scheme and compare to standard tables
• Often adopt rates from standard tables with
  adjustment, as thought appropriate
• If very large scheme may use own experience
• Projections based on standard tables, with
  adjustment
• May also consider mortality rates or rates of
  improvement in population projections
• Bases likely to vary by occupations covered, type
  of work, regions

64
Cohort expectations of life at age 65, males
65
Comparison of 92 tables and 2006-based pop
projections cohort eol65 UK males
66
CMI 00 Series Tables

• New tables issued 1 Sept 06 based on
• 1999-2002 data 00 series
• Data at oldest ages sparse and unreliable
• Two methodologies proposed for projections,
  emphasis now on providing measures of uncertainty

67
SAPS investigation

• Data from consultants to pension schemes
• 354 validated submissions with 3.8m records to
  March 2007
• Just over 300 schemes remainder resubmissions
• 2000-04 data analysis published 1 Oct
• Possible draft graduations for consultation
  end-2007
• Possible paper on mortality improvements in 2008
• Results published as CMI Working Papers (WP29)
• http//www.actuaries.org.uk/Display_Page.cgi?url/
  library/cmi.xml

68
CMI Mortality Tables

• Insured lives mortality lower than general
  population
• Mortality by amount lower than by lives
• SAPS mortality higher than for those in insured
  pension schemes
• SAPS mortality differential by amount
• Differential highest at younger ages
• Differential by industry
• Financials lowest
• Basic Industries highest

69
Projection methodologies

• Many different methodologies
• Predicting changes in mortality by cause
• Extrapolating past trends
• Aiming for target mortality in some future year
• Key feature for risk management is estimation of
  uncertainty in projected mortality
• CMI investigated stochastic methodologies
• Cohort effect considered important

70
Probabilistic/stochastic methodologies

• Many candidate methodologies
• Regression/extrapolation/smoothing (e.g.
  P-spline)
• Time-series (e.g. Lee-Carter)
• Projection of future life tables (c.f. term
  structures)
• What has the CMI done so far?
• Explored P-spline models and Lee-Carter models in
  detail
• Issues with both both dependent on improvements
  in past data
• Published a library of around 50 different
  projections
• The CMI will contribute to research but does not
  expect to recommend particular models

71
Projections sources of uncertainty

• Model uncertainty
• Parameter uncertainty
• Stochastic uncertainty
• Measurement error
• Heterogeneity
• Past experience may not be good guide
• (e.g. change in business mix)

72
Challenges

• Can we understand past drivers of mortality
  change and quantify their effects?
• Can better predictive models of mortality risk be
  developed?
• Where are the dangerous concentrations of
  longevity risk?
• Can mortality/longevity risk be securitised?

73
Mortality improvements and Life Expectancy

• OPA 25 October 2007
• Adrian Gallop
• ONS