Growing old together

In a highly topical presentation at ICA2023, Jeff Humphreys explored a number of aspects of sex and gender and longevity that are not only of interest to actuaries but also to the general population.

The person in the street may not care much for actuarial tables or demographics but they do know that women live longer than men. Yet Humphreys says even this truism may not be true forever. In his view, the point to note is that the average female lived longer than the average male, as all discussions of mortality are an outcome of past habits and different environments.

At an early age, mortality rates are quite similar, but in the 20s there’s an enormous fall in the ratio of female to male mortality due to the testosterone-fuelled leap in males’ risk-taking behaviour. This divergence very slowly moves back to parity. In comforting news to committed partners who are growing very old together, at age 100, male and female life expectancy is the same.

More alike than we like to think

So what’s changing? What are the forces that are moving life expectancies closer together? Today, fewer men work in dangerous occupations. Male smoking has dropped to a level similar to females – at least in anglophone countries.

One of the most important elements in falling male mortality is a quite staggering decrease in motor accident deaths – which Humphreys nicknamed ‘the disappearing accident hump’.

To put it bluntly, far too many young men killed themselves in motor vehicles. They were inexperienced drivers, driving older, less safe cars and taking excessive risks. Thankfully, improved car manufacture and technology, driver training and enhanced road safety regulation have saved a lot of young male lives.

Humphreys shared a striking chart of deaths per 10,000 vehicles between 1925 and 2017. In the 1950s, deaths averaged around 10 per 10,000. By 2017 that number was closer to 1 per 10,000.

Interestingly, while males are trending to be more risk averse, more women now play heavy contact sports. As Humphreys pointed out, amongst his peer group, all the males had played heavy contact sports. Yet in that peer group’s children, more daughters than sons were playing heavy contact sports.

On more dangerous ground

As anyone who’s walked past construction sites in the past few years would have noticed there are now more women working in dangerous occupations. Meanwhile, the generally higher rate of obesity across the population is having more negative effects on women. They have a substantially increased risk of metabolic complications – particularly heart disease – due to increased obesity.

One of the interesting elements of the study of comparative male/female mortality is the importance of cultural factors. Over the past 50 years, in the anglophone countries such as Australia, the UK and the US, rates of smoking have dropped dramatically across both sexes. However, in Japan, the decline in smoking in men has been much slower. This is reflected in a still wider divergence between male and female mortality in later years in Japan.

Ratings versus risks

According to Humphreys one of the more interesting outcomes of reassessing how we think about sex and gender is the influence that debate will have in areas such as insurance, where rating on gender has been prevalent for many years. He drew a compelling difference between:

• ‘risk factors’ that influence the incidence or consequence of a risk and have a causal link AND
• ‘ratings factors’ used by insurers to determine a premium or benefit.

Essentially, a ratings factor is concerned with the sustainability of an insurance company. With maintaining its profitability and longevity.

Consumers are increasingly alive to this distinction. They are now concerned with fairness, looking to their insurer to offer them rates or cover that aligns to their specific risk and their specific behaviour. To see how powerful this trend is becoming, consider that in the European Union, sex is not allowed to be used as a rating factor.

Data brings better answers?

The increased ability to deploy big data – and to analyse that data – means it is now much easier to price insurance in relation to specific drivers’ behaviours, records and habits. Insurers can now promote less risky behaviour by, for example, using telematics and Driver Monitoring Systems (DMS) to price better drivers at a preferred rate. Or in life cover, by offering discounts to consumers whose healthier lifestyle make them intrinsically less risky.

In short Humphreys argues, the day may soon come where we remove sex as a ratings factor altogether. Insurers will be able to use much more granular insurance data and more refined calculations that provide a better result for them – and for consumers.

Did you miss out on the 2023 International Congress of Actuaries, or simply want a deeper understanding of the incredible range of insights shared at the Congress? You’re in luck!

We’re excited to share that ICA2023 sessions, slides and papers are now available on the ICA2023 website and the CPD Knowledge Hub. On the ICA2023 website, all recordings and slides are available on the program page. You can use the filters to browse sessions and slides by date, practice area and presenters — or you can run a keyword search to pull up sessions linked to your interests. Papers are also available here. Remember to track your CPD learning via the CPD Knowledge Hub.

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