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The actuarial data onion

Actuaries tasked with analysing a portfolio's mortality experience face a gap between what has happened in the outside world and the data they actually work with.  The various difference levels are depicted in Figure 1.

Figure 1.  The actuarial data onion.

Written by: Stephen RichardsTags: Filter information matrix by tag: OBNR, Filter information matrix by tag: deduplication, Filter information matrix by tag: geodemographics, Filter information matrix by tag: survival analysis

How not to do postcode profiling

We have written extensively about how to use postcodes for mortality modelling. The best approach in the UK is to use so-called geodemographic profilers, which map postcodes to relatively homogeneous groups of households sharing certain socio-economic characteristics.
Written by: Stephen RichardsTags: Filter information matrix by tag: postcodes, Filter information matrix by tag: geodemographics

(Not) Falling for the fallacy

An important concept is demography is the ecological fallacy.  This is where aggregate data for a group are used to draw erroneous inferences about individuals belonging to the group. 
Written by: Stephen RichardsTags: Filter information matrix by tag: ecological fallacy, Filter information matrix by tag: smoking, Filter information matrix by tag: geodemographics, Filter information matrix by tag: asbestos

Health of the nation

Geodemographic profiles use addresses or postcodes to classify people into groups which are homogeneous with respect to variables like income, housing tenure and life stage.  The original purpose of geodemographic profiles was to improve targeting for marketing purposes. 
Written by: Stephen RichardsTags: Filter information matrix by tag: geodemographics, Filter information matrix by tag: Acorn, Filter information matrix by tag: Health Acorn

Island life

We have written extensively about the use of postcodes and geodemographics for mortality modelling.  Two peer-reviewed papers recently presented to the Institute of Actuaries in London have testified to the power of geodemographics when applied to pensioner mortality: Richards (2008) and Madrigal et al (2009).
Written by: Stephen RichardsTags: Filter information matrix by tag: postcodes, Filter information matrix by tag: geodemographics, Filter information matrix by tag: Mosaic, Filter information matrix by tag: Acorn, Filter information matrix by tag: Guernsey, Filter information matrix by tag: Jersey, Filter information matrix by tag: Isle of Man

A Scottish question

The Scots are an innovative bunch, including the inventor of the telephone and the discoverer of penicillin.
Written by: Stephen RichardsTags: Filter information matrix by tag: Scotland, Filter information matrix by tag: region, Filter information matrix by tag: geodemographics

How wrong could it be?

We have written previously about the importance of the independence assumption when modelling mortality for annuities and pensions. In a recent presentation to the Royal Statistical Society I showed the audience how life insurers deduplicate their annuity data and how they use postcodes to identify socio-economic status.
Written by: Stephen RichardsTags: Filter information matrix by tag: deduplication, Filter information matrix by tag: mortality, Filter information matrix by tag: annuities, Filter information matrix by tag: geodemographics, Filter information matrix by tag: Mosaic

Sweating your data assets

In recent years insurers have looked to making better use of the data they already have. The appeal is simple: if you have already collected the data, then it is like leaving money on the table if it is not being exploited to the full.
Written by: Stephen RichardsTags: Filter information matrix by tag: postcodes, Filter information matrix by tag: geodemographics, Filter information matrix by tag: smoking, Filter information matrix by tag: missing data, Filter information matrix by tag: P-squared

Size isn't everything

In an earlier post we discussed the correct way of using postcodes for analysing mortality, and also how this works in countries outside the UK.  It is worth re-iterating why insurers use so-called geodemographic profiling.
Written by: Stephen RichardsTags: Filter information matrix by tag: postcodes, Filter information matrix by tag: geodemographics

Modelling and the maple leaf

We get a lot of interest in our software from Canada. We don't know specifically why this might be — despite that fact that two of our founders are Scottish, we are not aware of any distant relatives still panning for gold out there.
Written by: Gavin RitchieTags: Filter information matrix by tag: postcodes, Filter information matrix by tag: Canada, Filter information matrix by tag: geodemographics