The 5-year evolution of VitaCurves Canada

Since our journey began in Canada in 2015, we have supported Canadian longevity stakeholders with a wide array of insights and analytics, including our collaboration with the Canadian Institute of Actuaries on a paper covering the methodology behind VitaCurves, research notes on a wide array a topics powered by the Club Vita data set, a regular series of webinars featuring many special guests from around the industry and of course our regular VitaMins and Top Charts series. And as we look to the future, there is even more thought leadership and research to come! It is part of our DNA.

The evolution of VitaCurves

Since the release of the first Canadian VitaCurves, the plans participating in the club have almost tripled and VitaBank pensioners have grown by over 300,000, translating into our data set covering approximately 1 in 4 of all Canadian defined benefit pensioners. This growth has in turn supported enhancing our models over our five editions, allowing an even greater ability to tailor baseline longevity expectations to individual plans. We can now capture 8.1 years of diversity in life expectancy at age 65 for men and 7.1 years for women. We started with 6 longevity factors and have added a 7th factor since then, resulting in hundreds of individual VitaCurves mortality tables each representing the combination of longevity factors.

Our survey says…

Over the last few weeks, we have been exploring longevity-related issues via our LinkedIn quiz questions, highlighting how things have changed between the first and fifth release of Canadian VitaCurves.

Without further delay, let’s recap the results and look at the percentage of correct answers.

Well done to everyone who got questions right. We presented a tricky set of answers to some of these, so seeing overall responses that are convincingly better than random (we’ll gloss over question 5 for now 😉) shows that friends of Club Vita truly are an observant group!

What do these questions tell us about the changing world of longevity?

The world of longevity has changed over the five years since we released our first version of Canadian VitaCurves. We selected the polls to highlight some of these changes. (We could have selected many other questions - the Club Vita team loves data; you should have seen the brainstorming session!)

First, we saw the increasing number of centenarians in Canada. This is due to a combination of factors including a growing population, an aging population, and improvements in longevity. Increasing numbers of old age people has several impacts on society. This could create higher demand on the health and care professions, as well as opportunities for businesses serving older demographics. This fact also highlights the individual risk to which pension plans can be exposed? Retirees with the highest benefits are the most likely to make it to 100, so if the life expectancy of these retirees is not estimated correctly, the pension plan may end up paying significantly more than expected.

Second, we highlighted the advances in health-related technology. Admittedly, the cost of sequencing the genome did not fall significantly over the last five years, but if we look a bit further back, we see some startling gains. In 2007 it cost well over 1m USD, and now the cost is under 1,000 USD. Developments like these could have significant effects on future longevity. When we analyze data and information, we look at the variation during a given period while considering the context surrounding the specific time.

In our third question we highlighted the aging of the Canadian population, showing that the working-age population in Canada has not increased at the same pace as the over 65-year-old population. A lower ratio of working age people to pensioners will put strain on public services funded through taxation, especially services such as healthcare that are in high demand amongst the retired population. This could have knock-on effects to future longevity. However, this situation may become a catalyst for better use of technology and more efficient healthcare delivery translating into increased longevity. Either way, these developments need to be monitored.

Our fourth question highlighted the level of wealth inequality in Canada. The country is diverse so different levels of affluence and other socio-economic factors will impact health outcome, and ultimately longevity expectations. It is very important for pension plans to assess the effect these factors have on their populations to get a good understanding of life expectancy and to select assumptions appropriate to their specific plan characteristics.

You will have guessed that our final question on tornadoes was in relation to climate change. 2020 saw more tornadoes in Ontario than 2017, 2018 and 2019 combined and 2021 so far has seen even more than 2020. As the years go on, we are seeing more and more extreme climate events. This has the potential to have significant effects on future longevity. It is very difficult to assess exactly how climate change will play out in the future, however assessing the possible impacts of extreme scenarios is central to good risk management, and longevity risk is no exception.

We are looking forward to producing the next five versions of VitaCurves and all the research, webinars, VitaMins and Top Charts that will go with it. We hope you’ll join us on the journey!

1 Statistics Canada. Table 17-10-0005-01 Population estimates on July 1st, by age and sex

²https://www.genome.gov/about-genomics/fact-sheets/DNA-Sequencing-Costs-Data

³ Statistics Canada. Table 17-10-0005-01 Population estimates on July 1st, by age and sex

⁴ Statistics Canada. Table 11-10-0193-01 Upper income limit, income share and average of adjusted market, total and after-tax income by income decile

^{5 Northern Tornadoes Project}