### Socio-economic differentials: convergence and divergence

#### (Jun 18, 2018)

Many western countries, including the UK, have recently experienced a slowdown in mortality improvements.  This might lead to the conclusion that the age of increasing life expectancies is over.  But is that the case for everyone?  Or are there some groups in the UK who are still experiencing mortality improvements?  The short answer is that mortality rates are still falling for the least deprived half of the population in England, while mortality improvements since 2011 have been virtually zero for the most deprived third.  This has important consequences for reserving for pensions and annuities, so let us explore in a bit more detail.  The findings in this blog are based on some early results of research…

### Fifty years of mortality improvements

#### (Jun 2, 2017)

In an earlier post we looked at the development of the distribution of age at death over time.  We saw how the peak adult age at death had continuously moved towards an ever-higher age.

Actuaries, of course, are very interested in the development of mortality rates over time.  Animation 1 shows the development of the crude observed force of mortality for males of retirement age in the UK since 1961. It shows that mortality rates have fallen at all ages, but much more so at ages below 80 than above.

Animation 1. Male mortality rates by age in England and Wales since 1961 (log scale). Click on the chart to restart the animation. Note that the mortality rates were calculated using post-2001 population estimates that had…

### Pensioners — the youth of today

#### (Sep 9, 2016)

This blog focuses on two particular features of mortality improvements: improvements around retirement age and improvements for the (very) old.  Figure 1 shows $$\mu_{x,1961}/\mu_{x,2012}$$, the ratios of the forces of mortality over the ages $$x = 50,\ldots,95$$, in 1961 and 2012 for four countries.  The figure was obtained as follows: data for ages 50-95 and years 1961-2012 were downloaded from the Human Mortality Database and the raw 2D mortality table was smoothed using 2D P-splines (see my earlier blog for details on 2D smoothing with P-splines).  The ratios plotted in Figure 1 were obtained from the resulting smooth mortality surface.

Figure 1.  Mortality ratios, $$\mu_{x, 1961}/\mu_{x, 2012}$$,…

### Reverse Gear

#### (Dec 8, 2015)

Against a background of long-term mortality improvements it is understandable to expect that societal change and developments in health care will be agents of progress. Recent research from Princeton Professor of Economics Anne Case and Nobel prize-winning economist Angus Deaton jolts such complacency in the starkest way. It reveals that since the late nineties, the all-cause mortality improvements experienced by white non-Hispanic Americans in midlife (ages 45 to 54) have not simply slowed, but slammed into reverse.

It quickly becomes clear that this research contains a telling illustration of basis risk. The researchers note that the scale of the effect had been missed since it played out so strongly…

### Reviewing forecasts

#### (Oct 19, 2015)

When making projections and forecasts, it can be instructive to compare them with what actually happened. In December 2002 the CMI published projections of mortality improvements that incorporated the so-called "cohort effect" (CMIB, 2002). These projections were in use by life offices and pension schemes in the United Kingdom from 2003 onwards. Since population mortality rates are now available for the ten-year period since then, we can compare actual improvements to the projections from 2003.  This is done in Figure 1.

Figure 1: Population mortality improvements 2003-2013 and corresponding CMI cohort projection bases. Source: Own calculations using national life tables from the ONS and the cohort…

### Weighing The Evidence

#### (Mar 10, 2015)

We've previously discussed the significant challenges involved in forecasting mortality by cause of death. Needless to say it isn't any easier to predict the impact of trends in lifestyle factors that drive those causes. One example is the research actvity around rising obesity, and specifically around the possibility rising obesity may negate the improvements in smoking-related mortality. Sturm and Wells (2000) asserted that obesity had a significantly higher impact on health outcomes than lifetime smoking or poverty. They reasserted these conclusions in 2002. It is clear that in both the US and UK we do see a diminishing prevalence of smoking allied with surging increases in obesity, but working out…

### S2 mortality tables

#### (Feb 9, 2014)

The CMI has released the long-awaited S2 series of mortality tables based on pension-scheme data.  These are the first new tables since the CMI changed its status (the S2 series is only available to paying subscribers, unlike prior CMI tables).  A comparison of the main S2 mortality rates with the preceding S1 rates is given in Figure 1.

Figure 1. Ratio of S2 mortality rates to S1 rates. Source: Own calculations using S1PA and S2PA tables from the CMI.

As expected, there have been large reductions in mortality, especially for males - at ages 60-80 there has been a fall of at least 15%.  This age range is key for pension-scheme reserves and annuity profitability.  The S1 series has an effective date of 1st September…

### No smoking without fire

#### (May 2, 2013)

Socio-economic differentials in life expectancy have a long history in the United Kingdom. A large part of this over the last few decades has been stark differences in smoking rates - people of a high socio-economic status are much less likely to smoke, resulting in longer life expectancy.

However, people also tend to associate with those of a similar socio-economic group, so I know relatively few smokers.  As a result, I was unaware of some changes in smoking habits until I saw the joiner refitting our office sucking on his pen a lot.  It turned out not to be a pen, but an electronic cigarette. The joiner had been a forty-a-day man - sixty if the day ended in a night out - until he replaced his favourite brand with a…

### Benchmarking VaR for longevity trend risk

#### (Mar 1, 2013)

I recently wrote about an objective approach to setting the value-at-risk capital for longevity trend risk.  This approach is documented in Richards, Currie & Ritchie (2012), which was recently presented to a meeting of actuaries in Edinburgh.  One of the topics which came up during the discussion was how the answers from the value-at-risk (VaR) method squared with how life offices actually change their projection bases in practice.  In particular, commentators were interested in what might be regarded as a "real world" example of a sudden change in projection basis, and how this might compare with the results from the VaR framework.

As it happens, we do have an historical example to call upon, and furthermore…

### Longevity and the 2011 Census

#### (Sep 5, 2012)

The Continuous Mortality Investigation (CMI) has just announced its decision to postpone the release of its mortality projection model until 2013, the main reason being to properly allow for the impact of the 2011 Census.  This deferral is very sensible as the 2011 Census has revealed some significant results for those with an interest in longevity.

On 16 July 2012 the Office for National Statistics (ONS) published population estimates for England & Wales based on information gathered in the 2011 Census. The headline was that the revised population estimate based on the recent census was just under 0.5 million higher than the previous population estimate (rolled forward from the 2001 Census).

However,…