Actuarial Profession announces three new mortality and morbidity research projects

Whilst the ageing population and increased longevity are welcome indicators of health and societal improvements, they present new challenges for business and government alike. Mortality investigations are the cornerstone of actuarial science but also constitute an area with considerable scope for interdisciplinary studies with medical, social science and demographic fields.

Recognising this, the Profession called for research proposals which would consider one, or more, of the following key areas:

• Understanding the drivers for change in mortality and longevity
• How will successive cohorts differ and why?
• How far can the approach to drilling down to individualised risk help in exploring the connections between populations and individuals, including the impact on mortality of biological and life style risk factors such as nutrition, exercise, and alcohol consumption?

The successful proposals were:

• University of Southampton and Barnett Waddingham LLP - Bayesian Modelling of Mortality Projection Uncertainty
• Heriot-Watt University - Mortality Models for Multiple Populations using Covariates
• King’s College London - Genetic risk profiling for common diseases

Dr Gerard Kennedy ASA of the University of Southampton of the research team of himself, Professor Jon Forster, also of the University of Southampton and Mr Neil Robjohns FIA of Barnett Waddingham LLP said: “Mortality projection is of vital importance to the actuarial profession, but is subject to uncertainty, and it is critical that such uncertainty be accurately quantified. Currently, uncertainty quantification, if performed at all, is done within the context of a single mortality projection model. However, there is no universally agreed such model, and fully coherent uncertainty quantification should also account for model uncertainty. Bayesian statistical methodology provides a fully coherent framework for estimation in the presence of model uncertainty, but practical implementation within the context of mortality projection is under-explored, and will form the main focus of our research. Potential benefits of this research would be improved pricing and assessment of risk exposures and capital requirements in respect of longevity risk transactions, greater understanding of and confidence in the quantification of both mortality projection uncertainty and the tail of longevity risk, and improved management of such risk.”

Dr Torsten Kleinow of Heriot-Watt University said: "Our project will
develop new mortality models for multiple populations. These models will be based on covariates; in particular smoking prevalence. Our aims are to refine predictions of mortality rates, and explain differences between mortality rates for different cohorts and populations."

Professor Cathryn Lewis of King’s College London said: “Genetic studies have identified genes contributing to the common, complex disorders that confer a major public health burden, such as heart disease and diabetes. This raises the prospect that individual-level genetic screening can be used to identify those at increased risk of such diseases, which will have implications for actuarial practice.  This research proposal will develop statistical models for genetic risk profiling, providing a framework for investigating genetic risks at a population level.”

Notes for editors

1. Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.
2. Members of the Profession have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.
3. The Profession is governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of the Profession in society.
4. The Profession is available to provide expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.

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