While mountain biking this morning at 6:15am along &quot;the ridge&quot; single track trail, which is both great for my longevity (cardiovascular exercise) and also a longevity threat (basically scares me to death), one of my best friends, a baby boomer health nut asks me, &quot;what do we really know about longevity?&quot;
I had to think quickly as we were coming up on a particularly treacherous turn and so just barked out a few of the real longevity highlights:
We know that improved longevity is truly a global phenomenon and that people are living longer in Europe, North America and Asia, both in developing and developed countries!
The key source of longevity improvements are medical advances, lifestyle changes, environmental conditions, and technological developments.
We have a huge exposure to longevity risk, the risk that we outlive our savings. In the US and Canada we have over $7 trillion in exposure, with over 95% of this in Defined Benefit pension plans.
The financial impact from even very modest changes in longevity is dramatic.
If a 70-year-old male, who is expected to die at 86, has an improvement in mortality of just one year to age 87, his nest egg needs to increase by 4%!
We really aren't taking about science fiction here, just one more year of life expectancy.
Clearly holders of longevity risk, like pension plans, and annuity writers, are taking notice, and are investigating solutions like longevity insurance, that allow them to transfer longevity risk to reinsurers like Swiss Re.
Longevity is a long term business, and being a part of a company with such a remarkable 150 year history makes Swiss Re a very credible longevity partner.
So what we know is longevity risk is real, large, with material financial impact, and there are practical solutions for holders of this risk to transfer it.
Wooooaaah!! Where did that tree come from? Better focus on the mountain biking…
Category: Funding longer lives: Health/medicine, Long-term care, Pension/retirement