Living to 100 Insights on the Challenges and Opportunities of Longevity Literature Review 2002–2017 April 2019 Living to 100 Insights on the Challenges and Opportunities of Longevity SPONSOR Research Expanding Boundaries Pool AUTHORS Sean She, FSA, MAAA Committee on Life Insurance Research Francisco J. Orduña, FSA, MAAA Product Development Section Peter Carlson, FSA, MAA Committee on Knowledge Extension Research 1 | P a g e This publication has been prepared for general informational purposes only; and is not intended to be relied upon as accounting, tax, financial or other professional advice. It is not intended to be a substitute for detailed research or the exercise of professional judgement. Please refer to your advisors for specific advice. 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Copyright ©2019 by the Society of Actuaries. All rights reserved. 2 | P a g e Contents Contents .............................................................................................................................................................................................................. 3 1. Introduction............................................................................................................................................................................................. 4 2. Acknowledgments ................................................................................................................................................................................ 6 3. Executive Summary.............................................................................................................................................................................. 7 4. Summary of Literature Reviewed ............................................................................................................................................... 11 4.1 Part 1: The Analytical Process .......................................................................................................................................... 11 4.1.1 Overview ............................................................................................................................................................................... 11 4.1.2 Data Selection and Validation ...................................................................................................................................... 12 4.1.3 A Priori Expectations ....................................................................................................................................................... 24 4.1.4 Assessing Trends in Underlying Mortality and Morbidity .............................................................................. 39 4.1.5 Identifying Possible Predictors of Changes in Future Improvement Patterns ...................................... 55 4.1.6 Selecting the Appropriate Projection Model ......................................................................................................... 77 4.2 Part 2: The Social and Economic Implications of an Aging Population .......................................................... 92 4.2.1 Seniors in the Workforce ............................................................................................................................................... 94 4.2.2 Social Security Support for Retirement ................................................................................................................. 101 4.2.3 Challenges for Retirement Systems ........................................................................................................................ 107 4.2.4 Challenges for Long-Term Care Systems .............................................................................................................. 117 4.2.5 Challenges for Health Care Systems ........................................................................................................................ 121 4.2.6 Innovation Within the Private Industry ................................................................................................................ 126 4.2.7 Relevant Symposia Materials ..................................................................................................................................... 133 5. Closing Remarks ...............................................................................................................................................................................138 Appendix A: Census of Articles ........................................................................................................................................................ A-1 Appendix B: Census of Discussions ................................................................................................................................................ B-1 Appendix C: Categorization of Articles by Practice Area and Analytical Phase .......................................................... C-1 Appendix D: Summary of Mortality Models ............................................................................................................................... D-1 3 | P a g e 1. Introduction Living to 100 is a research initiative featuring triennial international symposia as a means to share knowledge and cultivate innovation. Sponsored by the Society of Actuaries (SOA) with many partners, the symposium brings together a diverse group of scientists and academics to share and discuss their knowledge on longevity. They discuss the latest scientific information on what makes us age and how aging has changed in the recent past; they examine recent trends in survival rates and construct projections for the future; they ponder the consequences for social, retirement, long-term care and health care systems; and they examine the implications of an increasingly elderly workforce and identify private industry innovations that aim to address the challenges of an aging population. There have been six Living to 100 symposia, which were conducted in 2002, 2005, 2008, 2011, 2014 and 2017. Each has produced a lasting body of research (the “symposia material”) that can educate and aid interested parties in understanding longevity and its societal implications. The SOA commissioned Ernst & Young LLP (EY) to prepare a literature review based on the material presented at the six symposia. The review provides an overview of the technical material related to data sources, validation techniques and methodologies used by leading practitioners to develop mortality rate estimates for past, present and future periods. It also presents discussions regarding business, policy and social implications of increasing longevity. The views presented in this report are exclusively those from Living to 100 symposia authors and panelists. They do not reflect EY views or perspectives. In particular, this report aims to: Provide an overview of the research and discussions presented at the symposia, highlight areas of consensus or disagreement within the research presented, and identify gaps in knowledge. Present the techniques for modeling mortality and forecasting future mortality exposed in the symposia, followed by applying a subset of those techniques to the U.S. general population data, while also identifying the challenges in applying such techniques and strategies to overcome them. Contribute commentary from interviews in which practicing actuaries discuss the lessons learned from implementing advanced-age mortality models in their work and perspectives on symposia topics. Provide a catalyst to the actuarial community to look beyond the modeling and forecasting aspects of old- age mortality, start conceptualizing the broader implications of increased longevity, and influence policymakers and regulators. Facilitate the content and relevance of symposia materials to the broad professional community and the general public and promote an interdisciplinary focus. Several other areas within the SOA are also engaged in work related to the implications of long life, but that work is beyond the scope of this literature review. Additional work and research can be retrieved from SOA research committees like the Committee on Post-Retirement Needs and Risks Research and SOA sections such as the Long Term Care Insurance, Pension and Health sections. The body of the report present various techniques for determining base mortality rates and forecasting older-age mortality. We hope this presentation illustrates the practical applications of these techniques, provides insight into the thought