The widespread adoption of GLP-1 weight-loss drugs could reduce mortality rates in the coming decades, according to new research from Swiss Re.
Under optimistic scenarios, Swiss Re projects that GLP-1 medications could reduce all-cause mortality in the US by as much as 6.4% by 2045; in the UK, the research suggests a reduction of over 5% is possible.
Swiss Re’s research focuses on the US and UK, where obesity rates are high compared to other countries; The US has the developed world’s highest obesity rate, at over 40% of the total adult population, while in the UK, the 2022 Health Survey for England estimated that 28% of adults in England were obese and a further 36% were overweight.
Swiss Re’s modelling also presents more cautious outcomes. In a pessimistic scenario, there is limited uptake in the population, high discontinuation rates especially due to side effects, and widespread weight regain after treatment finishes. Under these conditions, Swiss Re sees much more limited improvements, with US cumulative mortality reductions of just 2.3%, and 1.8% for the UK by 2045.
These numbers are significant for the actuarial community as even small, sustained shifts like this can ripple through the longevity and mortality markets in big ways. For large buyers of longevity risk such as life insurers active in the bulk purchase annuity market, a 2.3% cumulative drop in fatalities in the US could translate to tens of thousands fewer annual mortalities, meaning many more payouts over time.
The life settlement market works with healthier, wealthier clients than the average American, however. But one could argue that these are the very people who can afford the drugs if they need or want them. Therefore, there could still be noticeable impacts on the market even in Swiss Re’s pessimistic scenario.
“GLP-1RA drugs appear poised to influence mortality outcomes not only for cardiovascular disorders but potentially also for Alzheimer’s and other dementias. Emerging studies suggest benefits across these conditions, with some even proposing that GLP-1RA drugs could eventually be considered on par with statins or antihypertensive therapies in terms of mortality impact,” said Rahul Nawander, Medical Director at Fasano Underwriting.
“While the evidence is still evolving and longer-term data are needed, early prospective analyses indicate that GLP-1RA therapies might extend life expectancy by roughly two to three years. If these projections hold true, life settlement asset managers may have to be prepared for material shifts in longevity assumptions. Without timely adjustments to life expectancy models, the effect of GLP-1RA drugs could contribute to unexpected downward pressure on returns.”
Swiss Re’s report’s optimistic scenario depends on a broad uptake of GLP-1 therapies and people adhering to treatment. Most importantly, it will require people implementing lifestyle changes that support long-term health improvements. Without these changes, studies have shown that weight regain and rebound effects are common, with full weight regain possible within a year after patients discontinue these drugs.
While it might be logical to assume that rebound weight gain – particularly among seniors – could reduce an individual’s longevity risk, it is important to recognize that additional costs may still need to be incurred or may already have been incurred.
“Current life expectancy models may have not yet accounted for the potential effects of GLP-1 therapies. As a result, there is a possibility that, if these drugs do in fact contribute to meaningful extensions in life expectancy, insured individuals may need to be re-underwritten multiple times. This introduces an additional layer of cost and operational complexity, which could ultimately affect both investors and life settlement providers,” said Dr. Nawander.
One way that this risk could be mitigated is through lower purchase prices of policies in the first place to get ahead of potential LE extensions down the road. And there could be an unlikely benefit – an increase in supply of policies to the secondary market.
Many seniors already lapse or surrender policies when premiums become unaffordable in retirement and extended lifespans could amplify financial pressures, especially if GLP-1 treatments themselves add to out-of-pocket costs, which can often be $700–1,300 per month without full coverage. This could lead to more sellers entering the market, boosting transaction volume and liquidity. For investors, a larger supply means more options and therefore, potentially more opportunity.
Another potential mitigant lies in the specific age of the insured. The life settlement market sees policyholders from their 60s into their 90s, which have significantly different health profiles.
“GLP-1 drugs do seem to have the potential to lengthen longevity for the younger cohorts that enter the life settlement market, and that is something that investors will need to consider,” said Chris Conway, Chief Development Officer at ISC Services.
“But for the older cohort, some of the health-related damage that comes with being obese will already have been done, so it’s more difficult to tell whether there would be a longevity extension here. Almost certainly there would be an improvement in health-span, but it depends on how much the life settlement population is using these drugs and the difference in their efficacy among this population.”
Life settlement portfolio managers have been dealing with longevity risk for years, and the emergence and prevalence of GLP-1 drugs, whilst potentially one of the more significant developments in recent years, will be a subset of longevity risk that will be analysed and underwritten like other inputs – and is an investment risk that can be mitigated.
“It is important to remember that life settlements deal in micro-longevity – we look at individuals and their own circumstances, unlike large buyers of longevity risk-exposed blocks such as life insurers with a bulk annuity transaction which deal with more general mortality tables,” said Conway.
“Life settlement portfolio managers are, and can be, by definition, more selective with regards to the policies they buy and therefore the overall longevity risk and return profile of their portfolios. The returns they produce do not necessarily have to fall because of an increase in longevity risk because the purchase price can adjust.”