Leukaemia research break through

Genetic research has identified that AML is actually a mix of 11 distinct diseases triggered by thousands of mutations in 111 genes associated with the disease. Truly a momentous step towards personalized cancer treatment.




CBRE published transaction data for hotel investments in Q1 2016 - they continue to reflect the recent bullish market trend. Cap rates in London, regional UK, Paris, and top 5 German cities are low, and stable. Other European markets show dynamic growth patterns. 




Different jurisdictions are grappling with the legal and technical framework for autonomous driving. Google's DeepMind showed the power of self learning algorithms playing the game of Go against the best player globally. For autonomous driving, 'the challenge is cultural and regulatory'. Different companies are subscribing to different strategies - Google's own taxi service and the 100 cars embedded by Volvo in the UK traffic will quickly achieve wide acceptance soon in replacing the most dangerous aspect of driving - human drivers.



Doctor assisted dying in one of the largest markets for life settlements will irreversibly change the last 6 to 12 months of life expectancy experience in a key market.


CALIFORNIA’S lawmakers are moving slowly to implement a bill legalising doctor-assisted dying. Even so, for residents of the most populous American state who are terminally ill and want a doctor’s help to cut short their suffering, the wait has been protracted. In October 2015 California’s governor, Jerry Brown, said he would not veto a bill that state lawmakers had passed the previous month. In a short open letter he said that he put the right of Californians to decide according to their own consciences ahead of his own religious beliefs. Yet that was not the end of the story. Mr Brown supported the bill via a special legislative session called to discuss (among other things) how the state should pay for doctor-assisted dying. His assent meant little until that session ended; 90 days after it adjourned, California’s proposal would come into effect.

The extraordinary legal session ended on March 10th; doctor-assisted dying will thus be allowed in California from June 9th. (With strict safeguards: two doctors must agree that a patient has less than six months to live, and the patient must have undergone rigorous questioning to make sure that he or she is of sound mind and really wants to die.) Things are moving quicker now that date has been set: on March 30th the state’s senate health committee voted to pass a bill on to the senate’s appropriations committee that would establish a free telephone helpline providing information to those considering taking their lives with the support of physicians.

Source: http://www.economist.com/news/internationa...

No more insulin injections ?

MIT appears to have made significant headway in the treatment of diabetes type 1. Another step in improved treatment that undoubtedly will sooner or later have an impact also for type 2 cases.

In patients suffering from Type 1 diabetes, the immune system attacks the pancreas, eventually leaving patients without the ability to naturally control blood sugar. These patients must carefully monitor the amount of sugar in their blood, measuring it several times a day and then injecting themselves with insulin to keep their blood sugar levels within a healthy range. However, precise control of blood sugar is difficult to achieve, and patients face a range of long-term medical problems as a result.

A better diabetes treatment, many researchers believe, would be to replace patients’ destroyed pancreatic islet cells with healthy cells that could take over glucose monitoring and insulin release. This approach has been used in hundreds of patients, but it has one major drawback — the patients’ immune systems attack the transplanted cells, requiring patients to take immunosuppressant drugs for the rest of their lives.

Now, a new advance from MIT, Boston Children’s Hospital, and several other institutions may offer a way to fulfill the promise of islet cell transplantation. The researchers have designed a material that can be used to encapsulate human islet cells before transplanting them. In tests on mice, they showed that these encapsulated human cells could cure diabetes for up to six months, without provoking an immune response.

Although more studies are needed, this approach “has the potential to provide diabetics with a new pancreas that is protected from the immune system, which would allow them to control their blood sugar without taking drugs. That’s the dream,” says Daniel Anderson, the Samuel A. Goldblith Associate Professor in MIT’s Department of Chemical Engineering, a member of MIT’s Koch Institute for Integrative Cancer Research and Institute for Medical Engineering and Science (IMES), and a research fellow in the Department of Anesthesiology at Boston Children’s Hospital.

Anderson is the senior author of two studies describing this method in the Jan. 25 issues of Nature Medicine and Nature Biotechnology. Researchers from Harvard University, the University of Illinois at Chicago, the Joslin Diabetes Center, and the University of Massachusetts Medical School also contributed to the research.

Encapsulating cells

Since the 1980s, a standard treatment for diabetic patients has been injections of insulin produced by genetically engineered bacteria. While effective, this type of treatment requires great effort by the patient and can generate large swings in blood sugar levels.

At the urging of JDRF director Julia Greenstein, Anderson, Langer, and colleagues set out several years ago to come up with a way to make encapsulated islet cell transplantation a viable therapeutic approach. They began by exploring chemical derivatives of alginate, a material originally isolated from brown algae. Alginate gels can be made to encapsulate cells without harming them, and also allow molecules such as sugar and proteins to move through, making it possible for cells inside to sense and respond to biological signals.

However, previous research has shown that when alginate capsules are implanted in primates and humans, scar tissue eventually builds up around the capsules, making the devices ineffective. The MIT/Children’s Hospital team decided to try to modify alginate to make it less likely to provoke this kind of immune response.

“We decided to take an approach where you cast a very wide net and see what you can catch,” says Arturo Vegas, a former MIT and Boston Children’s Hospital postdoc who is now an assistant professor at Boston University. Vegas is the first author of the Nature Biotechnology paper and co-first author of the Nature Medicine paper. “We made all these derivatives of alginate by attaching different small molecules to the polymer chain, in hopes that these small molecule modifications would somehow give it the ability to prevent recognition by the immune system.”

After creating a library of nearly 800 alginate derivatives, the researchers performed several rounds of tests in mice and nonhuman primates. One of the best of those, known as triazole-thiomorpholine dioxide (TMTD), they decided to study further in tests of diabetic mice. They chose a strain of mice with a strong immune system and implanted human islet cells encapsulated in TMTD into a region of the abdominal cavity known as the intraperitoneal space.

The pancreatic islet cells used in this study were generated from human stem cells using a technique recently developed by Douglas Melton, a professor at Harvard University who is an author of the Nature Medicine paper.

Following implantation, the cells immediately began producing insulin in response to blood sugar levels and were able to keep blood sugar under control for the length of the study, 174 days.

“The really exciting part of this was being able to show, in an immune-competent mouse, that when encapsulated these cells do survive for a long period of time, at least six months,” says Omid Veiseh, a senior postdoc at the Koch Institute and Boston Children’s hospital, co-first author of the Nature Medicine paper, and an author of the Nature Biotechnology paper. “The cells can sense glucose and secrete insulin in a controlled manner, alleviating the mice’s need for injected insulin.”

The researchers also found that 1.5-millimeter diameter capsules made from their best materials (but not carrying islet cells) could be implanted into the intraperitoneal space of nonhuman primates for at least six months without scar tissue building up. 

“The combined results from these two papers suggests that these capsules have real potential to protect transplanted cells in human patients,” says Robert Langer, the David H. Koch Institute Professor at MIT, a senior research associate at Boston’s Children Hospital, and co-author on both papers.  “We are so pleased to see this research in cell transplantation reach these important milestones.”

Cherie Stabler, an associate professor of biomedical engineering at the University of Florida, says this approach is impressive because it tackles all aspects of the problem of islet cell delivery, including finding a source of cells, preventing an immune response, and developing a suitable delivery material.

“It’s such a complex, multipronged problem that it’s important to get people from different disciplines to address it,” says Stabler, who was not involved in the research. “This is a great first step towards a clinically relevant, cell-based therapy for Type I diabetes.”

Insulin independence

The researchers now plan to further test their new materials in nonhuman primates, with the goal of eventually performing clinical trials in diabetic patients. If successful, this approach could provide long-term blood sugar control for such patients. “Our goal is to continue to work hard to translate these promising results into a therapy that can help people,” Anderson says.

“Being insulin-independent is the goal,” Vegas says. “This would be a state-of-the-art way of doing that, better than any other technology could. Cells are able to detect glucose and release insulin far better than any piece of technology we’ve been able to develop.”

The researchers are also investigating why their new material works so well. They found that the best-performing materials were all modified with molecules containing a triazole group — a ring containing two carbon atoms and three nitrogen atoms. They suspect this class of molecules may interfere with the immune system’s ability to recognize the material as foreign.

The work was supported, in part, by the JDRF, the Leona M. and Harry B. Helmsley Charitable Trust, the National Institutes of Health, and the Tayebati Family Foundation.

Other authors of the papers include MIT postdoc Joshua Doloff; former MIT postdocs Minglin Ma and Kaitlin Bratlie; MIT graduate students Hok Hei Tam and Andrew Bader; Jeffrey Millman, an associate professor at Washington University School of Medicine; Mads Gürtler, a former Harvard graduate student; Matt Bochenek, a graduate student at the University of Illinois at Chicago; Dale Greiner, a professor of medicine at the University of Massachusetts Medical School; Jose Oberholzer, an associate professor at the University of Illinois at Chicago; and Gordon Weir, a professor of medicine at the Joslin Diabetes Center.


India : Demographic dividend or Longevity malaise ?

The State Bank of India (SBI) is one of the largest employers in the country having228,296 employees and is also the largest lender in India with 14,816 bank branches of which 9,851 (66%) were in Rural and Semi-urban areas.  The SBI has decided to set aside Rs. 24 billion for the year 2014 to meet the pension liabilities and has simultaneously revised upwards the actuarial Life Expectancy (LE) of its pensioners from 76 years to 81 years.  In 2014 SBI’s net profit was Rs. 34 billion- that is 70% of the net profit is being kept aside towards pension liabilities.  Although, the average age of the 228,000- plus people who make up SBI is 48 years, the median age is likely to be higher, 50 years.  That means with retirements, there will be nearly 8,000 in 2015and a similar number every year after that, significant proportion of the future profits would go towards paying the pension liabilities.  The risks due to longevity will build slowly over time, and if not addressed soon could have large detrimental effects on already weakened balance sheet of SBI, making them vulnerable to more shocks and potentially affecting financial stability. SBI’s increased liability due to longevity isjust a microcosm of the similar problem that India needs to address in not too distant future.

The International Monetary fund (IMF) discusses the financial implications of longevity risk(IMF (2012)) and states that if an individual lives 3 years longer than expected, the already large cost of aging can increase by another50% in case of advanced economies and by 25% in the case of emerging economies.  While the impact of this longevity extension has on pension liabilities varies according to interest rate levels and the specific demographics of each individual pension plan, every year of additional life expectancy is generally thought to add about 4% to the present value of pension obligations for a typical pension fund.

The data from the World Health Organisation(WHO (2013)) states that the average LE at birth for Indian males is 66 years and that for females is 70 years. According to the report,
 a person retiring at age 60, however, is on average likely to live for another15.72 years (Males) and 17.69 years (Females), the average being 16.69 years. By extending the LE for its retired from 76 years to 81 years, SBI has implicitly recognised the superior medical condition of its retirees. Thus a 60 year old SBI banker is expected to live for 21 years that is almost 5 years longer than a normal 60 year old Indian. But, still less than the average 60 year olds from Japan (25.5 years), Singapore (24.64 years), UK (23.58 years), and US (23 years).
 Although it does seem that Indian Seniors have a long way to catch up, however, with better sanitation, food and old-age care a large proportion of the elderly population will reach the global standards within one generation. And therefore,  the rising cost due to the increase in old-age demographics in general and people living longer in particular is something public policy decision-makers in India have to consider sooner than expected.

To appreciate the scale of the future problem faced by India consider a simple calculation.  Currently, 9 %  (108 million) of the Indian population (total 1.2 billion) are above 60 years old.  If the government were to spent towards the health care and social service cost of at least $ 2 per senior person per day (assume 365 days in the year), the total figure per year 108 x 2 x 365 = $ 79 billion. The cost would be 4.29% of its current GDP (2013) of $ 1.842 trillion. By 2050, 20% of the Indian population would be aged 60 years and above. Based on the projected population of 1.6 billion, around 320 million Indians would be over 60 years old. Healthcare cost would be $ 234 billion (320 x365) and this number is not adjusted for inflation. To maintain constant the expense at the conservative load of 4.29% of GDP of India, the GDP should increase to234/0.0429=5.45 trillion in 2050. The GDP would need to grow by at least 9.75% per year till 2050 ! Over the last 10 years never has India’s GDP exceeded 9.75%.

The life expectancy at birth in India climbed from low 20s years in 1950 to 65 years in 2011, reflecting declines in infant mortality and survival at older ages in response to public health improvements. Therefore over 61 years (1950 to 2011) the LE has increased by 9 months per calendar year. The increasing longevity has lead to a rapid increase in the elderly population while low fertility has slowed the growth of the working-age (15-59 age group) population. Most of these elderly citizens come from India’s 300 million strong middle-class or more affluent groups, where better long-term nutrition and healthcare has extended lifespans far beyond the current national average of 66 years.

The growth rates among the elderly (60+ years) since 1950, were much higher than that of the general population growth rate. Whereas the general population grew at 2% per annum, those aged 60+years grew at 2.78% per year. India has had significantly less time as compared to developed countries to accommodate the sudden rise in the number of the senior citizens. In 2000, 7% of India’s population or about 73 million were over 60 years old by the year 2042 about 14% of projected population is 1.6 bln, that is about 224 million people. India’s transition to a society with significant old-age population will happen in three decades, compared to Europe, which has aged gradually over the past 100 years.

  1. IMF (2012), Global financial stability report, in ‘World Economic and Financial Surveys’, pp. 29–45.
  2. WHO (2013), ‘Office of management and budget’, http://www.who.int/countries/ind/en/


Predictors of Exceptional Longevity: Effects of Early-Life and Midlife Conditions, and Familial Longevity

Knowledge of strong predictors of mortality and longevity is very important for actuarial science and practice. Earlier studies found that parental characteristics as well as early-life conditions and midlife environment play a significant role in survival to advanced ages. However, little is known about the simultaneous effects of these three factors on longevity. This ongoing study attempts to fill this gap by comparing centenarians born in the United States in 1890–1891 with peers born in the same years who died at age 65. The records for centenarians and controls were taken from computerized family histories, which were then linked to 1900 and 1930 U.S. censuses. As a result of this linkage procedure, 765 records of confirmed centenarians and 783 records of controls were obtained. Analysis with multivariate logistic regression found the existence of both general and gender-specific predictors of human longevity. General predictors common for men and women are paternal and maternal longevity. Gender-specific predictors of male longevity are occupation as a farmer at age 40, Northeastern region of birth in the United States, and birth in the second half of year. A gender-specific predictor of female longevity is the availability of radio in the household according to the 1930 U.S. census. Given the importance of familial longevity as an independent predictor of survival to advanced ages, we conducted a comparative study of biological and nonbiological relatives of centenarians using a larger sample of 1,945 validated U.S. centenarians born in 1880–1895. We found that male gender of centenarian has a significant positive effect on survival of adult male relatives (brothers and fathers) but not female blood relatives. Life span of centenarian siblings-in-law is lower compared to life span of centenarian siblings and does not depend on centenarian gender. Wives of male centenarians (who share lifestyle and living conditions) have a significantly better survival compared to wives of centenarians' brothers. This finding demonstrates an important role of shared familial environment and lifestyle in human longevity. The results of this study suggest that familial background, some early-life conditions and midlife characteristics play an important role in longevity.


At Rigi Capital Partners, we are well aware of the impact that diabetes, obesity and other life style choices have on longevity. The effect of life style choices have been documented since the 1970s.

Forget what we learned in school from that old diagram called the tongue map, the one that says our five main tastes are detected by five distinct parts of the tongue. That the back has a big zone for blasts of bitter, the sides grab the sour and the salty, and the tip of the tongue has that one single spot for sweet. The tongue map is wrong. As researchers would discover in the 1970s, its creators misinterpreted the work of a German graduate student that was published in 1901; his experiments showed only that we might taste a little more sweetness on the tip of the tongue. In truth, the entire mouth goes crazy for sugar, including the upper reaches known as the palate. There are special receptors for sweetness in everyone of the mouth's ten thousand taste buds, and they are all hooked up, one way or another, to the parts of the brain known as the pleasure zones, where we get rewarded for stoking our bodies with energy. But our zeal doesn't stop there. Scientists are now finding taste receptors that light up forsugar all the way down our esophagus to our stomach and pancreas, and they appear to be intricately tied to our appetites. 

The second thing to know about sugar: Food manufacturers are well aware of the tongue map folly, along with a whole lot more about why we crave sweets. They have on staff cadres of scientists who specialize in the senses, and the companies use their knowledge to put sugar to work for them in countless ways. Sugar not only makes the taste of food and drink irresistible. The industry has learned that it can also be used to pull off a string of manufacturing miracles, from donuts that fry up bigger to bread that won't go stale to cereal that is toasty-brown and fluffy. All of this has made sugar a go-to ingredient in processed foods. On average, we consume 71 pounds of caloric sweeteners each year. That's 22 teaspoons of sugar, per person, per day. The amount is almost equally split three ways, with the sugar derived from sugar cane, sugar beets, and the group of corn sweeteners that includes high-fructose corn syrup (with a little honey and syrup thrown into the mix). 

"That we love, and crave, sugar is hardly news. ... Cane and beets [were] the two main sources of sugar until the 1970s, when rising prices spurred the invention of high-fructose corn syrup, which had two attributes that were attractive to the soda industry. One, it was cheap, effectively subsidized by the federal price supports for corn; and two, it was liquid, which meant that it could be pumped directly into food and drink. Over the next thirty years, our consumption of sugar-sweetened soda more than doubled to 40 gallons a year per person, and while this has tapered off since then, hitting 32 gallons in 2011, there has been a commensurate surge in other sweet drinks, like teas, sports aides, vitamin waters, and energy drinks. Their yearly consumption has nearly doubled in the past decade to 14 gallons a person. 

"Far less well known than the history of sugar, however, is the intense research that scientists have conducted into its allure, the biology and psychology of why we find it so irresistible.  "For the longest time, the people who spent their careers studying nutrition could only guess at the extent to which people are attracted to sugar. They had a sense, but no proof, that sugar was so powerful it could compel us to eat more than we should and thus do harm to our health. That all changed in the late 1960s, when some lab rats in upstate New York got ahold of Froot Loops, the supersweet cereal made by Kellogg. The rats were fed the cereal by a graduate student named Anthony Sclafani who, at first, was just being nice to the animals in his care. But when Sclafani noticed how fast they gobbled it up, he decided to concoct a test to measure their zeal. Rats hate open spaces; even in cages, they tend to stick to the shadowy corners and sides. So Sclafani put a little of the cereal in the brightly lit, open center of their cages -- normally an area to be avoided -- to see what would happen. Sure enough, the rats overcame their instinctual fears and ran out in the open to gorge. 

"Their predilection for sweets became scientifically significant a few years later when Sclafani -- who'd become an assistant professor of psychology at Brooklyn College -- was trying to fatten some rats for a study. Their standard Purina Dog Chow wasn't doing the trick, even when Sclafani added lots of fats to the mix. The rats wouldn't eat enough to gain significant weight. So Sclafani, remembering the Froot Loops experiment, sent a graduate student out to a supermarket on Flatbush Avenue to buy some cookies and candies and other sugar-laden products. And the rats went bananas, they couldn't resist. They were particularly fond of sweetened condensed milk and chocolate bars. They ate so much over the course of a few weeks that they grew obese. 

"'Everyone who owns pet rats knows if you give them a cookie they will like that, but no one experimentally had given them all they want,' Sclafani told me when I met him at his lab in Brooklyn, where he continues to use rodents in studying the psychology and brain mechanisms that underlie the desire for high-fat and high-sugar foods. When he did just that, when he gave his rats all they wanted, he saw their appetite for sugar in a new light. They loved it, and this craving completely overrode the biological brakes that should have been saying: Stop. 

"The details of Sclafani's experiment went into a 1976 paper that is revered by researchers as one of the first experimental proofs of food cravings. Since its publication, a whole body of research has been undertaken to link sugar to compulsive overeating. In Florida, researchers have conditioned rats to expect an electrical shock when they eat cheesecake, and still they lunge for it. Scientists at Princeton found that rats taken off a sugary diet will exhibit signs of withdrawal, such as chattering teeth."

Source: Salt Sugar Fat: How the Food Giants ...

Fight against terminal cancer


'Spectacular' success rates in the fight against terminal cancer are reported in the application of immunotherapy drugs. It is stunning to see the wide range of cancers that can be effectively fought with these new drugs, as well as the late stage of the illness in which drugs can still be effectively applied. At a substantial price of 100,000 GBP per patients these drugs are not cheap - but what if life insurance companies were to fund for the benefit of existing policy holders - life settlements in reverse!


Source: http://www.telegraph.co.uk/news/health/new...

Texas Medicaid law : A Watershed moment for Life Settlements ?

Traditionally, to enroll in Medicaid, individuals needed to be in dire situation. In the past, many people spent down or surrendered their assets (including life insurance) in order to become eligible for this needed medical coverage.  The new law in Texas, however, enables individuals with a life insurance policy to enter the Medicaid program provided they obtain a life insurance settlement and use the proceeds specifically for long-term care.

On June 14, Texas Governor Rick Perry signed into law a bill that lets Texas state Medicaid officials tell policyholders applying for Medicaid assistance that they can sell their contracts to a life settlement company to cover custodial healthcare expenses. Those who do so could receive Medicaid when the settlement funds are used up. 

The significance of the law can be gauged from the fact that it is being replicated in other states. California, Kentucky, Florida, Louisiana, Montana, North Carolina and New Jersey have crafted similar bills to be considered by their legislatures. By next year, many of the largest states could expand the use of life settlements through legislation. The ramifications for the life insurance industry are enormous to say the least.

  Moody's Investor Service recently stated that the Texas law "will pressure life insurers' profitability as life settlements keep in force policies that would otherwise have been surrendered.

“[The law] is credit negative for life insurance companies because the state’s endorsement and potential expansion of life settlements will pressure life insurers’ profitability as life settlements keep in force policies that would otherwise have been surrendered,” Moody’s states in its report. “This will result in life insurers ultimately paying death benefits to investors instead of a much smaller surrender value amount to policyholders.

“With similar bills in seven other states pending, an expansion of life settlements on a large scale would produce fewer lapses and more covered deaths than life insurers originally priced for, hurting their profitability,”

  This will result in life insurers ultimately paying death benefits to investors instead of a much smaller surrender value amount to policyholders."  the report adds. 

One of the major pricing assumptions in Insurance companies is that majority of the policies will lapse- that is individuals pay their premiums for decades but then surrender their policy or allow it to lapse. Billions of $s of profit have been made due to the lapsing of the policy.


Mortality probability of H7N9 at 36%

In a paper titled "Human infection with avian influenza A H7N9 virus: an assessment of clinical severity" published in the Lancet, the authors have concluded  that the fatality risk for patients that enter a hospital after having contracted the H7N9 avian flu virus at 36%.

The authors obtained information about laboratory-confirmed cases of avian influenza A H7N9 virus infection reported as of May 28, 2013, from an integrated database built by the Chinese Center for Disease Control and Prevention. They estimated the risk of fatality, mechanical ventilation, and admission to the intensive care unit for patients who required hospital admission for medical reasons. They also used information about laboratory-confirmed cases detected through sentinel influenza-like illness surveillance to estimate the symptomatic case fatality risk.

Based on the mortality rate of 36%, human infections with avian influenza A H7N9 virus seem to be less serious than has been previously reported. Many mild cases might already have occurred. Continued vigilance and sustained intensive control efforts are needed to minimise the risk of human infection. 

While somewhat more benign than the previous strain identified in 2003, we are still seeing the emergence of difficult to transmit, but highly lethal strains from time to time. We still believe it only to be a question of time until a specific strain becomes more virulent.


Source: http://www.thelancet.com/journals/lancet/a...

Socio-economic factors impact mortality - impairment based insights

It may sound straight forward, but living a less comfortable life for your entire life will in tendency shorten your life. An interesting study out of Switzerland (Institute of Social and Preventive Medicine, University of Berne) compared frequency of deaths (by impairment category) with the floor that the apartments of the study subjects were located on. The majority of Swiss citizens does not own property, but rents. The amount of rent one pays depends in high-risers on the floor the apartment is situated on (think views to the mountains....). The floor someone lives on thus becomes an indicator of disposable wealth. It is interesting to note that over more than 10 years there were significant differences in mortality between people living on the ground floor and people living above the eighth floor of a building. 

The authors  included just over 1.5 million people living in buildings with four or more floors and found that mortality from all causes was higher in people living on the ground floor compared to those living on higher floors. An association with floor of residence was evident with causes associated with socio-economically patterned behaviours, such as smoking or diet. For example, mortality from cardiovascular and respiratory diseases declined with higher floors of residence, whereas no association was evident for prostate cancer.

For an active investor in biometric risk, there is meaningful information available, but the sources may not be what one expects.

Source: https://docs.google.com/file/d/0B0tSnMSdaz...

London IPO for provider of annuities for the unhealthy elderly

It is encouraging to see that Cinven, the private equity company, is looking to list Partnership Assurance which 

provides annuities for unhealthy elderly. We often come across simplistic questions about the ethics of the life settlements

business. In life settlements, the insured receives an up-front lump sum payment. In annuities, the insured pays a lump sum to receive regular payments thereafter. In both cases, the investor (or the insurance company) makes an assessment of the insureds health status. Claims of 'death bonds' or 'death annuities' deprives unhealthy elderly receiving money. 

Source: http://www.ft.com/cms/s/0/c902e154-bbae-11...

High yield return for investors confirmed in an extensive study

Professor Naik from the London Business School will be presenting a long-range study on a significant number of settled policies that will show double digit returns for investors in life settlements. We await the publication of the full report, but would not be surprised to find that the variance of results will also be quite apparent, further highlighting the need for selectivity and operational efficiencies.

Source: http://blog.lisainstitute.org/2013/05/10/l...

Lung cancer in the UK

The BBC presenter Mr. Robert Peston known more for his cutting edge stories on the credit crises and status of the global economy, deviated from his normal self and wrote an insight article on the status of the lung cancer research in the UK.  

Incidentally, Robert's wife - Sian Busby who was a life long non-smoker died of lung cancer died of lung cancer on September 2012  at a young age of 51.

The statistics revealed in the article paints a disturbing picture. According to  Mick Peake, the clinical leader of the National Cancer Intelligence Network Lung cancer accounts for around 13% of all cancers in the UK and 22% of cancer deaths,  So that's 42,000 new cases identified every year, and around 35,000.

To put that into  context of other forms of cancer, the next biggest cancer killer is bowel, which accounts for just under 16,000 mortalities per annum and then breast, which kills under 12,000 a year.

What is also striking, and horrifying, is how quickly lung cancer kills sufferers. Recent figures from the Office of National Statistics show that 83.3% of breast cancer sufferers are alive five years after diagnosis, just over 51% of bowel cancer sufferers live at least five years and 79% of prostate cancer sufferers survive five years.

In stark contrast, the five year survival rate for lung cancer is 8.8% for women and 7.4% for men.

Here is perhaps an even more chilling number: according to the ONS more than 70% of lung-cancer sufferers are dead in less than a year after diagnosis.

The article states  one reason on why lung cancer patients have such high mortality is the meager  funding for lung cancer research.  The conclusion is based on the data  published by the National Cancer Research Institute, which receives information on cancer research spending from 22 organisations responsible for most cancer research in the UK.  Cancer Research UK (the most important research organisation), the Department of Health, Wellcome Trust and the Association of the British Pharmaceutical Industry have provided extensive data for the study. 

In 2012, breast cancer received research funding of £ 41 mm, Leukaemia received research funding of £ 32 mm, bowel cancer received £ 35 mm, Prostate cancer got £ 21 mm and lung cancer - remember it is the biggest killer - got less than £ 15mm. In fact, 

The trend has continued for the past 11 years where Lung cancer has received significantly less than these other cancers have secured for research in every one of the 11 years of data published by the NCRI.

Breast cancer receives just over £3,500 of research funding per death from the disease. Leukaemia receives over £7000 of research funding per mortality. Lung cancer receives just over £400 per death.

There is a wide perception hat lung cancer sufferers have only themselves to blame, because they've smoked all their lives, and they tend to be old.  The median age of diagnosis for lung cancer is 72, but with 42,000 diagnosed every year there are many thousands of sufferers who are much younger. Moreover,  experts have also stated  that they have historically over-estimated the link between smoking and lung cancer. Mick Peake, for example, says that around 10% or men and 15% of women who have the disease are people - like  Robert's late wife - who have never smoked. Others say that around 20% are never smokers. So that is, as a minimum, more than 5,000 new cases per year in people who have never smoked and around 4250 deaths.

Of course there is a strong causal link between smoking and lung cancer. But is depriving smokers of help and hope tantamount to saying that addicts of all sort should be left to rot - which most people presumably say would be an appalling attitude?

Source: http://www.bbc.co.uk/news/business-2231082...

The avian flu virus: H7N9

Since the first reported case at on 31 March 2013, there has been 96 confirmed cases and 20 deaths attributed to Avian bird flu virus - H7N9.

The World Health  Organisation (WHO) said that the outbreak was unlikely to become pandemic and that there is no evidence of ongoing human-to-human transmission. The lack of evidence of ongoing human-to-human transmission suggests that the virus is undergoing "stuttering transmissions" in which a virus that normally circulates in an animal reservoir infects a person, but further human-to-human transmission does not occur.

However, Dr. Keiji Fukuda, WHO's assistant director-general for health security and environment, casts a sombre note in his assessment  at a Toronto interview that "I think we are genuinely in new territory here in which the situation of having something that is low path in birds (yet) appears to be so pathogenic in people... And then to have those genetic changes ... I simply don't know what that combination is going to lead to." "Almost everything you can imagine is possible. And then what's likely to happen are the things which you can't imagine". 

The irony is that so far the international community's only response for viruses originating from poultry such as SARS, mad cow and the swine flu (H1N1)  has been to perform mass-scale culling. H7N9, however, originated from pigeons which is not classified a poultry.

We believe that pandemic risk continues to keep us on our toes. The emergence of a large number of very large new cities in Asia alongside substandard infrastructure remains an ideal breeding ground for disease. Combined with a ready conveyor belt in the form of global mobility, the scene is set for impacts on general population which will outpace epidemiological experience so far. We keep our eyes on the look-out for new, airborne diseases. H7N9 is not 'it'.

National Geographic on Longevity - ethnic markers explain a lot of the headline news

In this month's National Geographic there is a good article on the progress being made identifying the genetic markers for centenarians. As the life settlement market wakes up to the fact that an 80 months life expectancy is not equal to another 80 months life expectancy, we also get to the politically incorrect statements that certain genetic markers are more prevalent in certain ethnic communities. Now that these statements come from the National Geographic, we can more easily deal with longevity markers in the Ashkenazi Jewish and Japanese American population. It has not been made explicit - but a Japanese born and bred male emigrating to and living in the US and a US-born male of Japanese descent have quite different longevity profiles. Longevity is micro, case by case !

Source: http://ngm.nationalgeographic.com/2013/05/...

Simplification still is the most powerful enemy for insight

Earlier we reported on the pitfalls of complex calculation being done in Excel. The Financial Times has added an additional dimension into the discussion about excel spread sheets and errors in them.  Spreadsheets or more complex programming language based systems are an invaluable tool to generate insight. Being able to understand the results the tools produce, requires meaningful data (the old 'garbage in garbage out rule') as well as intellectual  discipline and domain expertise to interpret results.

Source: http://www.ft.com/cms/s/0/1c5d3284-a77b-11...

A poor tradesman blames his tools

The analysis of Reinhart and Rogoff (both associated with Harvard) in their paper titled "Growth in the time of Debt " (2010) has been questioned following a graduate student's effort to replicate the original result.

The paper claims that sovereign GDP grows at a snail's pace once a country's debt/gdp ratio exceeds a 90% threshold. This was used by international financial organisations as well as U.S presidential candidate Paul Ryan to argue the merits of austerity. Governments have justified their focus on fiscal rebalancing  citing the "credible" evidences of the Reinhart and Rogoff paper.

The current debate about the need and benefits of austerity both within countries (Greece, Italy, France, the UK) as well as within the European Union are probably the most important policy debate in 2013.  It turns out that at the heart of the paper are faulty calculations in an excel spreadsheet. 

We often  come across numerous situation where Excel spreadsheets are used to make  investment decisions. First, Excel was never designed to run huge volume of data or perform extensive multi-time period simulation runs.  These are best done by programming languages such as C,C++, FORTRAN.

However, efficient use of programming languages requires substantial technical and domain experience. Excel remains a good tool for simpler calculations.

In one of our areas of activity, life settlements, we still see extensive use of Excel spread sheets with predictable results. We have seen stress tests and simulations take days to complete. In related context, recently even one of the life expectancy underwriters had to amend mortality tables again because of a problem with their mortality calculations.

At a portfolio level, the risk of life settlements cannot be understood and even less managed using excel spread sheets.