Longevity

The global consulting firm Mercer recently launched a pension buyout index.

Demand for longevity risk has been returning to the UK pension market.

High levels of volatility during the financial crisis deterred many players in the pension buyout market.

The return to normalcy in the capital markets may, in fact, be contributing to under-pricing of longevity risk among those who are providing solutions to UK pension plan sponsors who seek to offload longevity-related liabilities.

A worthwhile article in the Financial Times discusses the range of options that are currently available to UK pension plan sponsors:

The United Kingdom has what is arguably the most sophisticated market in the world for financing longevity risk.

The market for pension buyouts is developing and the demand among pension sponsors to off-load longevity risk is srtong.

The issue is that there is a relative lack of capacity or ability to meet the demand.

Reinsurers are active in the buyout market but the capacity is limited, and the longevity derivatives markets are relatively illiquid when compared to more established derivatives markets.

During his campaign, President Obama pledged to remove the stem cell restrictions imposed by the Bush administration.

Initial progress in this regard is underway as thirteen embryonic stem cell lines were approved for use by U.S. funded researchers yesterday.

Human embryonic stem cells are controversial because the embryos are destroyed in the process of extraction.

On the other hand, researchers and other advocates believe that the benefits to society--including the use in regenerative medicine--outweigh such costs.

The Centers for Disease Control and Prevention reports that:

• The number of obese adults in the United States has more than doubled in the past 25 years.
• The number of obese adults in the U.S. now totals 34 percent of the population or 72 million people.
• Obesity related medical costs totaled $147 billion in 2008.
• Obesity accounts for 5 - 15 percent of deaths in the U.S.

Meanwhile, smoking is related to 18 percent of deaths.

Longevity risk has existed as an asset class for quite some time but has primarily been the focus of larger institutions.

In a recent Financial Times article, the author discusses the recent proliferation of longevity and mortality related investment products.

The range of product options include:

Annuities are complex, largely misunderstood, and often misrepresented in popular financial media.

The reality, though, is that these financial products are becoming an increasingly important part of the financial plans of millions of people around the world.  In fact, annuities are a vital component of the retirement planning process.

Aubrey de Gray is a biomedical gerontologist whose efforts are directed towards reversing the aging process--in other words, to enhancing human longevity.

He is also a co-founder and chief scientist of the Methuselah Foundation, a non-profit organization dedicated to extending healthy human life.

There are numerous resources that illuminate his goals and work. 

The recent interview available in the link below provides a snapshot of some of his views.

Source: Machines Like Us

Dan Buettner explores the world's Blue Zones and researches longevity as a writer for National Geographic magazine.

As the author "The Blue Zones: Lessons for Living Longer from the People who have Lived the Longest," Buettner shares his thoughts about the link between longevity and the rather basic diet of the people of Sardinia.

The Sardinian diet is heavy on bread, cheese and very dark red wine.  Meats are consumed infrequently and fish is relatively unimportant.  Nuts, fruits and vegetables are emphasized.

Harvard Medical School recently hosted a conference on aging.

The conference attracted longevity-focused companies such as Sitris Pharmaceuticals.  Sitris is a leader in the development of drugs that mimic the effects of resveratrol, a chemical found is red wines that longevity-related proteins called sirtuins.

According to Sitris co-founder Dr. Christoph Westphal:

“In five or six or seven years,” said Christoph Westphal, Sirtris’s other co-founder, “there will be drugs that prolong longevity.”