New mortality data show longevity improvements continue to decline

February 2, 2018
| United States

By John Fenton and Carrie Kelley

Information for U.S. mortality in 2016 is now available from the National Center for Health Statistics. These new data show that U.S. life expectancies declined in 2016. This is the second consecutive year of diminishing life expectancies, driven by declines in mortality improvement over the recent past. It is important for life insurers to understand these longevity trends in the U.S. life and annuity market. These declining life expectancies will impact both markets where the risk is living too long (longevity risk) as well as dying too early (mortality risk).

In June of 2016, Willis Towers Watson released the article “New mortality data show declining longevity improvements – how should life insurers prepare?” This article discussed the slowdown in mortality improvement over the period of 2010 to 2014, and juxtaposed it against the strong gains seen from 2000 to 2010.

The figure below provides an update of historical mortality improvement results from 2000 to 2010, and from 2010 to 2016. The difference shown is calculated as the most recent range less the previous decade, 2000 to 2010.

Historical mortality improvement

Period Gender 25-34 35-44 45-54 55-64 65-74 75-84 85+

Male -0.2% 1.8% 0.7% 1.3% 2.7% 2.0% 1.3%
Female -0.1% 1.0% 0.0% 1.8% 2.3% 1.5% 1.1%

Male -3.9% -2.3% 0.3% -0.6% 0.7% 1.3% 1.0%
Female -3.5% -1.5% -0.2% -0.7% 1.0% 1.1% 0.6%

Male -3.7% -4.2% -0.4% -1.9% -2.0% -0.7% -0.3%
Female -3.4% -2.5% -0.3% -2.5% -1.3% -0.4% -0.5%

Mortality comparisons

As in our prior analysis, the mortality improvement for all ages has decreased when comparing current data with the previous decade. Additionally, the data indicate mortality deterioration for most age cells up through age 65 for 2010 to 2016.

Our article from June 2016 discussed some of the key drivers in the slowdown and deterioration in mortality improvement. A review of the cause of death (COD) drivers for the 2015 and 2016 data shows continuation of the trends evident in the 2010 – 2014 data.

  • Heart disease and stroke were key drivers of 2000 – 2010 improvement. A relative slowdown for improvement for these diseases occurred from 2010 to 2016. This is consistent with views that high improvement in specific CODs may not be sustainable.
  • Accidents show stark deterioration for ages less than 65. A significant portion of these deaths are due to accidental poisonings, which would include prescription drug overdoses. Much has been written recently about the opioid crisis and how it has adversely impacted America.
  • Other CODs driving deterioration at ages less than 65 include chronic lower respiratory disease, diabetes and influenza.
  • Ages greater than or equal to 65 are significantly impacted by the slowdown of heart disease and stroke previously discussed. Reduction in improvement for chronic liver disease also impacts these ages.

Socioeconomic status makes a difference

Mortality has a socioeconomic component with better mortality for those of a higher socioeconomic status. The above mortality improvement rates reflect the general U.S. population. Based on our research and analysis, mortality improvement for higher socioeconomic statuses (which tends to correspond to typical insured populations) has been higher than improvement for lower socioeconomic statuses. Our research suggests the higher end of the socioeconomic strata has mortality improvement at age 65 over 1% greater than that for the working class.

Our assessment

Going forward, we believe it is appropriate to assume positive mortality improvement for the population for most ages. We believe that some of the adverse trends in opioid deaths will abate a bit, as more attention and resources are dedicated to this crisis. Indeed, the state of Massachusetts announced that it has seen a 10% reduction in opioid overdose deaths in the first nine months of 2017, relative to the prior year. Mortality improvement will be greatest at older ages, albeit at lower levels due to some of the slowdowns noted.

When coupled with socioeconomic adjustments, this will lead to reasonably significant rates of improvement for the higher socioeconomic statuses, particularly at older ages. Conversely, mortality improvement will be negative for the lower socioeconomic statuses, particularly at younger ages.

We believe it is important for companies to continue to monitor trends in this area and consider how socioeconomic classification impacts their insured populations. We also advocate for an overall corporate view on mortality improvement, including a long-term, comprehensive view, as opposed to a focus on siloed lines of business.