Jennifer Donohue, director, Algorithm and Extremal Consulting Limited, explains why the insurance industry has the opportunity to begin to solve one of its – and humanity’s – biggest challenges, that of an ageing population.
The insurance industry faces a growing and critical challenge in the shape of rising longevity risk. While people are living longer, they are doing so in bodies which are ageing poorly and require ever more extensive and expensive care and medical treatment as their quality of life diminishes.
Only this week the thorny issue of how to fund long term care has dominated the headlines as the UK Government wrestles with the issue of a rising elderly population. However, the age of the population is only part of the problem. It is the quality of the health of the elderly that places a huge burden on the care and health infrastructure, and it is a challenge that is replicated across the globe.
However, the growing life science sector may well have the ability to provide the answers so desperately needed.
Currently there are a wide range of research initiatives working towards new treatments that are designed to enhance the quality of life in old age by promoting the regeneration of cells and enhancing the immune system.
This is not the hunt for immortality, but the use of science to slow and even reverse the ageing process by treating ageing itself as a disease and not only its byproducts of specific age-related diseases…in areas which will dramatically enhance the quality of life in old age.
Some are likely to appear in retail outlets in the years and months ahead, but there is truly cutting-edge research already underway which may well see the use of stem cells to aid the regeneration of organs and repair tissue.
For instance, researchers are aware that cancer cells do not age or decay. One reason is the presence of a particular enzyme which stops the decay of the ends of chromosomes. One question being explored is whether that enzyme can be added to healthy cells to have the same effect.
It is not science fiction that work such as regenerative medicine is seeking answers to why DNA is affected by time in Outer Space. Solving this may seem fanciful but if we are to spend longer periods of time in space travel whether in the International Space Station or as tourists and ultimately colonisation of planets such as Mars to establish a livable habitat this will take many months and as such there is research underway to see how human DNA can be protected from the impact of Space travel. That research may also have a benefit for supporting the ageing process on Earth as well as extra-terrestrially.
The life sciences market is undertaking work that could be key to solving many of the issues that we currently face. What is impeding the delivery of these scientific breakthroughs is a simple lack of investment.
The inability to fund the research and, once developed, to create the infrastructure to manufacture these regenerative medicines to scale have long hindered the life science industry.
We, that is a group of gerontologists, scientists, mathematicians, insurers, longevity experts and business leaders, firmly believe that a solution to the investment shortfall should be found. As such we, along with leading figures in the City of London, are in the process of establishing QuILT, an investment fund that will research and identify those initiatives that show real promise. It will then look to deliver the investment to enable the work to be taken to a conclusion and with it the creation of a regenerative treatment or medicines that will make a difference.
Investors will be driving advances in life sciences and the amelioration of the ageing process.
We believe that for the life and pensions sector such a vehicle would go some way to providing “the ultimate hedge”. Whilst for others such as pension trustees, family offices, life science companies and potentially governments it adds to a diversification in investment risks and the creation of a potential new asset class. The results will also create tools that can be used to reduce future burgeoning liabilities of an ageing population
What the COVID-19 pandemic has shown is that huge benefits can be delivered if medical research is adequately funded. Scientists were able to create a vaccine using new technology that has the potential to form the basis of the development for vaccines against future viruses and did so in a matter of months rather than years.
Insurers and investment funds have the opportunity to play a part in not only the creation of new treatments, to be at the cutting edge of scientific breakthroughs but to engage in “venture philanthropy” whilst for some funding of such medicines will make a significant difference to the risks they are currently asked to assume.