Will Senescent Cell Clearance Therapies Sink the Pensions and Annuities Industry?

The annuities and pensions industries, private and public, include some of the largest of all financial institutions. Collectively they are enormous, representing a staggering amount of money under management. To simplify a complex picture greatly, most of these programs take the form of a wager against longevity. The competing companies that issue annuities and manage pensions make offers of future payments to their customers based on the consensus predictions of life expectancy, and on their own private models that seek to improve on that consensus for specific demographics and thereby price the future more effectively than their competitors. Customers seek the greatest payout, while companies seek the payout that will maximize overall profit by some mix of attracting more customers from competitors and greater per customer profit. Customers that live longer than expected drain away profit, but historically this has been balanced by those who died early, as the consensus mortality predictions have on the whole been pretty good in the past.

Still, signing a contract is a long bet, realized over decades, and this is an era of very rapid progress in biotechnology, coupled with an important change in the focus of the medical research community, now looking at the causes of aging where before they did not. I have said for years that I think it likely that a majority of the presently outstanding wagers against longevity have now become very bad for the issuing companies. Why is this the case? Because it is plausible that the first rejuvenation therapies will be comparatively cheap, become quickly and widely available via medical tourism within a few years of their discovery, and prove effective. By "effective" I mean something in the ballpark of adding five years to the life expectancy of the average 60-year old. From where I stand, it looks like senescent cell clearance via senolytic drugs has the strong possibility of realizing this sort of outcome. Five years of additional payments for a large percentage of contracts would be a real issue for financial institutions: while an increasing amount of hedging has been voiced by actuaries over the past decade, the consensus models in the actuarial industry make no provision for a sudden jump in life expectancy along these lines. No company has priced in this possibility, as they'd be quickly outcompeted by their less wary competitors. Thus a large fraction of the contracts issued over the past 20-30 years, and of those issued today, are going to look increasingly risky as senescent cell clearance moves ahead.

Chaos in the financial industry as a result of all this is not a distant possibility, either. The solvency of financial institutions is a matter of perception as well as hard figures, but beyond this consider that annuities and pensions have been packaged and resold as derivatives, or otherwise used as collateral for leverage by the issuing organizations. Companies have borrowed on the value of their annuity and pension contracts, and high levels of leverage are very common these days, causing vulnerability to sudden changes in expectations. This is a failing of our era, as exhibited in numerous financial instruments over the past few decades; mortgages spring to mind, for example. The values of annuity and pension contracts packaged for the financial industry are assessed on an ongoing basis on an expectation of future income and expenses. As the consensus for future longevity shifts, companies will be greatly impacted or even bankrupted as a result of changes in predicted future outcomes, magnified by the leverage of assets.

To be clear, pensions are already heading towards a bad end in many countries even without the advent of effective rejuvenation therapies. Government bodies and other entities have found it all too easy to make unsustainable promises, or to let themselves be effectively looted by present caretakers. Insolvency and unsustainable future obligations are everywhere. This is one of many forms of widespread corruption in which those with the ability and the short-term interest steal from the public purse in the expectation that higher powers in government will bail them out. Historically, this doesn't seem like an unreasonable expectation, sad to say. So the losses will be spread out over the population, or kicked down the road for some future generation to be bankrupted by. Sooner or later there will be a major collapse in economic stability or currency or government in the affected regions - and the sooner the better, as the longer this goes on, the worse and more protracted the collapse that will result. Life will go on afterwards, the progression to the long-term golden future picking up where it left off, but all of this short-sightedness and self-sabotage in the near term is so very needless.

One of the ways in which the savaging of the annuities and pensions industry might be minimized is through a bailout of some sort. This is, as I said, quite a likely outcome given recent history, but all it does is make the larger economic problem worse. Further, it will probably happen again as new rejuvenation therapies emerge. Another possibility is for this industry to lobby for dissolution or alteration of existing contracts, which again seems like a plausible outcome, essentially the use of political power to carry out a form of fraud by force upon every counterparty who signed something that later proved inconvenient. It is also possible that the availability of senolytic therapies via medical tourism, and at a reasonably low cost, will not lead to widespread adoption rapidly enough to bankrupt annuity and pension companies. This seems to me unlikely to help make the problem very much smaller, however. This scenario would make the problem occur later, further down the line, say a decade after it might have happened with rapid adoption of therapies. If an increase of five years of life extension is bankrupting in 2020, it is likely to still be highly problematic in 2030: the majority of the problem contracts be will still be around, active, and their owners expecting to be paid for a long time yet.

Do I think it is worth putting money into an annuity? I think this is a good wager in a world in which issuing companies have infinite resources, but this isn't that world. Sooner or later you will get cut off, via one of the mechanisms mentioned above. The important risk is that this might happen sooner to the point at which you'd have been better off investing elsewhere. The whole situation is very uncertain on timing and outcomes over the next few decades, and that is rather the point I'm trying to make here.

Comments

I have always that since society has not acknowledge that we will soon have the ability to significantly extend life, how could one take advantage of this knowledge. So, your blog was an interesting read, Reason

Reason, you estimated we can extend lives by 5 year, utilizing senescent cell clearance via senolytic drugs. Any thoughts (anyone) on how much longer we can extend lives by a secondary treatment (not getting rid of senescent cells, but one of the other 7 causes of aging)?

Posted by: Robert at January 13th, 2017 7:53 PM

@Robert: Well, to be clear, I don't estimate we'll gain five years via senolytics, I'm saying that five years is in the realm of the plausible and the possible. Not the same thing. No-one really knows until we try. I don't think results in mice are any good guide at this point, as we don't have any points of comparison for therapies that address root causes of aging between mice and people.

My expectations for good results are based on viewing aging as damage accumulation, therefore therapies that address damage like this should be robustly beneficial. The uncertainties in degree all revolve around whether the other classes of damage will still tend to kill you on the same schedule, even if you remove one of them.

And as to how much more you get when mixing with another rejuvenation treatment, that's even more of a question mark, and for the same reasons.

Posted by: Reason at January 13th, 2017 8:10 PM

Hi, just a 2 cent.

I think the large problem with medical tourism, is just getting there.
Transportation is major problem and hurdle that will keep these therapies 'off country at large/overseas'
thus obscure...most avg people won't even know about them, just 'oh in Europe they do rejuvenation therapy...ok''
end of discussion the moment people hear it's offshore and might be wary, I think. Anyone can hope on a flight to nowhere on
the four courners of the earth (still must also planned that) where it is offered/to get a medical rejuvenation
therapy of the future. But you have to get there, that will be a huge
wrench thrown in the cog wheels...it'S almost a 'project' how many people have a 500-1000$ for plane ticket - to just to get to some place
by airplane and then they have to stay over there a a least a day or two wating
for next flight... like paying yourself an all-vacation flight and tour, just
need 3-star bed & breakfast hotel with that (I should put that as motel rather than
hotel $$$). And then, pay for the therapy : let's say ball park figure of 500 $ for
a therapy I might be totally off! That's still over a 1000 dollars...ok let's put that at 2000$.
That's upwards 3000$. And we have to factor currency exchange (if you are in US you are saved,
if not and the therapy is not in your home country...it will double the whole thing when converted to US dollars). Only people who will rack up/save money over a year or more, can then use that money and get that therapy I think...it will be an 'investment' not something you can pay - 50 $ a therapy there you go... well-off people will have no problem getting it, but regular mass won'T I think until much later
when it becomes mass marketed sort of 'world wide'.

I want to believe that the first therapies will be cheap but I have a feeling it may not be so, it may be more expensive than we hoped (unaffordable because it is new and 'sought' generallty that means expensive price at the start (like a privilege that only rich people will have but then it will democratize in price and be affordable, just probably not right away).

I really believe AdG that he means to market this/democratize this to make it available
to everybody at a low price..but how low ? Me think not low enough at that start at least,
SENS spent millions, if billions, of dollars I have some difficulty believing they will giv their therapies for free (when they have to recoup ROI). If they don'T make money, they will increase the price tag making it a rich-thing privilege.

As for life insurance if we become eternal, this whole insurance thing will be changed completely. It may disappear. Same thing for pension...there will be total wipe out of the system as it is. Because gov won't want to put people on pension for eternity (eternity is costly $$ to the gov
the fatalist and ethic inclined will say). Perhaps there won't be anymore governements as we know them,
life extension and perhaps infinite lifespan will change the whole world down to it's very core.
And that'S a good thing, we don'T want to die anymore, if this model needs to end so be it. We'll adapt.
That's what humans have been doing for thousands of years.

Posted by: CANanonymity at January 13th, 2017 9:02 PM

The insurance companies will be fine, they will just lower the amount of money you will get. There are loopholes in the contracts.

People will see their friends getting less money, so they will retire later in life. This is already happening. Life expectancy increases a few years every decade. The only difference is what took thirty years, now will happen in ten.

Posted by: Peter Lind at January 13th, 2017 9:52 PM

PS: we have to remember a last article that spoke that the richest person allowed trials to happen, and to give that therapy or pill to the poorer participants, Basically to get 'access' to that pill/therapy the richest person had to pay for - the whole - thing, he/she paid His/Her pill/therapy, and Everyone else's in that trial. If SENS receives big money from millionaires and billionaires, that is like a god send and a foot in the tomb, because it tells SENS that - there are - milionaires and billionaires '(a)waiting' impatiently after they donate mega-huge amounts of their precious money; hoping finally that SENS happens and so they can be in first line to get the therapies. SENS (AdG) knows that very well, and it will always have those people to fall onto, so it may end-up at the very start one of 2 things : ultra-cheap or ultra-expensive. Ultra-cheap because absolutely no one is interested or 'buying it' but people will find out about it, and also, because they want to make it affordable to everyone...or Ultra-expensive, the millionaires are in line and want it first they could (bribe) SENS, at the expense of poorer people who will have to wait...kind of like when a new ULTRA-HD TV 4D-XXXX comes out...it's ridiculously overprices (15,000$ for 30 inche tv) that only filthyrich can get it, but in 2 yaers it's already down to 5,000$ (the first drop is the quickest), somewhat more available, then 5 years later it's still 'lingering' oscillating around 3000-5000$...it's just soo slow to go down to 500$, a price affordable in middle-class human society (basically 99.9999% of the population not the 0.0001% rich billionaires/mill.). Let's hope it's the former scenario and they Really Listen to the Average Joe/Jane on the street and Take Their Financial Means into consideration to pricing SENS therapies in accordance, not in accordance to their special VIP list of million/billionaires.

Posted by: CANanonymity at January 13th, 2017 10:50 PM

Nobody can know for sure, but my guess is that medical tourism for senolytics will be quite minor, maybe like cryonics today, so that scenario will not happen so soon.

Posted by: Antonio at January 14th, 2017 2:40 AM

I don't think there will be much in the way of medical tourism for senolytics. But there will be an underground market for it. Kinda like the internet narcotics trade. Physicians will probably give you the shot under the table for hefty sums.

Posted by: Anonymoose at January 14th, 2017 2:41 AM

I live in east europe, rejuvenation we probably be available via medical tourism 30-40 years before it became mainstream in my country.

Posted by: RS at January 14th, 2017 7:28 AM

RS: What is wrong with the Eastern Europe ? It is just next door to richest countries in the world, like Switzerland or Luxembourk. I guess it will take 30-40 years before radical life extension works at all. Then it should spread fast.

Posted by: Martin S. at January 14th, 2017 8:30 AM

I was hoping to rejuvenate abroad and get state pension before they recognise rejuvenation in my country, when rejuvenation became mainstream I don't think you could get state pension anymore.

Posted by: RS at January 14th, 2017 9:38 AM

In the private pension plan problems that are emerging in the USA, the solution looks like it will be to reduce the benefits proportionate to the shortfall in the plan.

One I was looking at was a trucker's pension plan of 400,000 beneficiaries, from many different trucking corporations, with 90% of plan members already retired. The plan has ~$18 billion in assets, but would need to have ~$36 billion in assets to be fully funded using the more recent actuarial estimate.

In this case, the employers and employees made the contractually agreed to remittances to the plan over the years. And despite a lot of finger pointing, the plan rate of return actually outperformed the S&P 500 over the last 35 years. The problem was as you said in the article, that the projections over the years were too rosy.

Since this plan is 50% underfunded, it looks like the benefits will be reduced by 50% for each beneficiary. This will be adjusted in the future depending on the future rate of return of the plan. For example radical technological advances like life extension technologies, may also mean future rates of return exceeding current projections.

Posted by: aa3 at January 14th, 2017 10:56 AM

"I don't think results in mice are any good guide at this point, as we don't have any points of comparison for therapies that address root causes of aging between mice and people".

But results from humans will take decades. Any thoughts on how to find out sooner? Could biomarker changes after senolytics be modelled to predict added life expectancy?

Posted by: Barbara T. at January 14th, 2017 4:50 PM

@Barbara T.: Biomarker changes will be pretty much all we'll have to go on for the first five to ten years, I'd imagine. Hence the interest in getting some of the promising biomarkers of aging out there and into production readiness sooner rather than later. Running studies in populations old enough to have notably high mortality might produce defensible results in five years, but then they are probably not going to be the people achieving the greatest results from the first generation therapies.

Posted by: Reason at January 14th, 2017 5:24 PM

Damn I feel worried these days. There is a Surreal almost electric tension in global society right now, I can feel it.
The automated trucks seems like they might arrive much sooner than what was anticipated, this should happen at the same time widespread society first hears about rejuvenation*.

What happens when the realization that eternal Life lingers around the corner, how far away is that widespread realization? Maybe some celeb will do the senescent cell thing and talk about it.

I wonder if Trump will shake up the FDA, could he force them to categorize aging as a disease with an executive order?
Peter Thiel better talk to Trump about that or he wasted all his Money supporting mr T.

We live in a 90s dystopic sci fi.

* (probably Senescent cells coupled with mito antioxidants and maybe some stem cell infusions would be a primitive first rejuvenation therapy, it´s possible right now in some sense, people on Longecity have tried Dasatinib and Quercetin for eg.)

Posted by: Arren Brandt at January 15th, 2017 7:31 AM

If it's at all feasible, one way to accelerate the development/acceptance of senolytics might be to apply them topically to improve skin cosmetics - or possibly in a penetrating DMSO solution to senescent cells in joint connective tissues.

Posted by: Lou Pagnucco at January 15th, 2017 7:29 PM

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