Historically, much of the conversation about the decades long continuous improvement in mortality rates has revolved around behavioural changes, such as stopping smoking, doing more exercise, and eating a better diet. Of course, these remain recommended public policy endeavours by governments around the world.
These are general recommendations, however, aimed, from a statistical perspective, at a large population just as much as they are aimed at an individual. But what has emerged in recent years, however, are advancements in technology that are enabling more tailored risk assessment and treatment of the individual, advancements that will have a profound impact on how companies and investors with exposure to longevity risk price that risk and construct their portfolios.
The increasing use and development of wearable technology is one key driver of this. Nicola Oliver, Founder at Medical Intelligence, which provides consulting services to actuaries, says that, whilst items like smart watches and smart clothing get the headlines, healthcare technology that is being developed for use in healthcare settings is an emerging area that brings a whole new meaning to what we think about ‘wearable’ tech.
“For instance, something known as ingestibles, which are small devices designed to be swallowed, are able to provide imaging of the gut, as well as feedback to a healthcare professional that an individual has taken prescribed medication – this is particularly useful for monitoring medication use in older people,” she said.
However, the use of personal wearable tech shouldn’t be underestimated for its clinical utility. One example is the potential to detect Atrial Fibrillation (AF), a condition where the heart beats rapidly and inefficiently for short periods of time, during which clots can form. If any of those clots get into the brain, they can cause a stroke. Prevention is better than the cure, so they say, and both personal wearables, and hospital-grade remote monitoring devices are providing encouraging results in early detection in situations like these.
“You may not be aware that you are having an abnormal heart rhythm and people have been diagnosed with AF who had no previous symptoms,” said Oliver. “If you’re aware of that abnormal heart rhythm, then preventive measures can be taken that could prevent you from having a stroke as well as other complications, where the clot can enter a lung, for instance.”
Big data and artificial intelligence offer further avenues for advancements in medicine and indeed, positive trends are emerging in this area as well. Lung cancer, for example, is typically diagnosed at a later stage, and the prognosis tends to be grim. Early-stage detection is crucial for increasing survival rates.
“A radiologist will read a CT scan and they are supposed to detect any subtle changes in that scan versus a scan of a healthy lung just with the naked eye. It’s a very difficult job and the rate of missing very small lesions is high,” said Oliver.
That’s not all. This typically can take around half an hour and the world generally has a shortage of radiologists.
Enter technology.
“AI, machine learning and deep learning can look at CT scans quickly and identify cancers that would not have been detected by a human. This is actually happening now, and in the U.K. for example, there are sites piloting the use of this technology and it’s showing great promise,” said Oliver.
The targeted therapies relating to the treatment of cancer can be very expensive and one of the challenges the medical industry faces is how to pay for all this. Most western economies have some version of a socialised health system and therefore the budgeting challenges that go with managing that. But even the model used in the United States doesn’t have an endless supply of money.
Fortunately, tech advancements aren’t limited to complicated medical conditions.
“A recent breakthrough in detecting heart disease involves a scan of the blood vessels feeding your retina,” says Oliver. “The tiny changes undetectable by the human eye can give us a risk ratio for an individual’s potential for having a heart attack. This is something that could typically take place at your local doctor’s surgery in the future.”
Both hardware and software are clearly driving advancements in this area but advancements in how humans use their own immune system to fight disease are also taking place. Monoclonal antibodies – synthetic antibodies manufactured in a lab that are given to patients with cancer that help their immune system identify and break down cancerous cells – came into use 20 years ago, and clinical trials continue with advancements in this area.
Due in no small part to the development of treatments during the pandemic, one area that has recently received much more coverage, however, is the use of mRNA solutions.
“When you look at the clinical profile of mRNA technology, it’s expanding. There is an understanding of this type of therapy and production can be incredibly fast and the understanding of that technology has accelerated over the last two years due to Covid,” said Oliver. “Advancements here are also enabling the move to more targeted treatments in the future.”
For companies and investors exposed to longevity risk, access to more and better data will enable them to model an individual’s life expectancy more accurately, and therefore price that risk better, whether that be a reinsurance company entering into a longevity swap with a defined benefit pension plan, or a life settlement investor conducting due diligence on an individual policy. The latter would have a substantial impact on the performance of a portfolio of life settlements, for example.
For the last 15 years, Oliver has been providing medical and sociodemographic insights to actuaries from across the industry that has typically covered the impact of newly approved pharmaceuticals and diagnostics, as well as wider issues including air pollution, pandemic potential of infectious diseases and health policy. Many organisations with exposure to longevity risk use actuaries, and Oliver says that the actuarial industry is paying increasing attention to technological developments when modelling longevity risk.
“Being prepared for some of these events has helped many of my clients make key adjustments to their assumptions on life expectancy, and thus gain greater insight into potential future longevity and mortality risk. Actuaries are embracing the fact that they need to understand these types of trends and that they do have an impact,” she said. “Technology in healthcare has the potential to mitigate risk much more at an individual level. This is going to have a massive impact on how pensions, insurers and investors understand and therefore model longevity for their businesses going forward.”
