Clear trend in lower rates of mortality improvements

The Continuous Mortality Investigation (CMI) has released its latest Mortality Projections Model, CMI_2017. The accompanying analysis shows that average mortality improvements over the six years since 2011 have been 0.5% per year for males and 0.1% per year for females. These are both significantly lower than for any other recent six-year period. This provides further evidence in favour of a change in trend, and suggests that the lower level of recent improvements is likely to be due to more persistent influences, rather than very short term events such as the early 2015 influenza outbreak.

The lower mortality improvements are reflected in lower life expectancies than in all previous versions of the CMI Model. The 2017 Model shows that cohort [1] life expectancies for individuals aged 65 at the start of 2018 are around 2 months lower, for both males and  females, compared with the previous version, CMI_2016.

Tim Gordon, Chair, CMI Mortality Projections Committee, said:

“There is much debate about the causes of the slowdown in mortality improvements, whether the low improvements will persist, and for how long. However, there is general agreement in the industry that the numbers are now reflecting a trend as opposed to a blip. Overall, mortality is expected to continue to improve, but the Model suggests this is likely to be at a slower rate in the next few years than in the first decade of this century”.

“Our Model aims to take a measured path and seeks to be neither over- nor under-responsive to emerging data. It is the standard model used by the insurance and pensions industries, providing an authoritative and independent overview. The model is designed to allow users to come to their own conclusions on improvements and plan appropriate financial reserves to meet their liabilities and commitments.”

The current CMI Mortality Projections Model was introduced in 2009 to replace previous projections, and has been updated on a broadly annual basis since then. It is based on mortality data for the population of England & Wales, published by the Office for National Statistics.

The Model does not make an assumption around long-term mortality improvements, requiring users to make their own assessment. It is typically used by UK pension schemes and insurance companies which need to make assumptions about future mortality rates.

Our Briefing Note has more information on The Mortality Projections Model, CMI_2017.

~ENDS~

Notes to Editors

1. Cohort life expectancy depends on assumed future changes in mortality. It is a subjective measure, and is typically used by actuaries who need to use realistic assumptions about what may happen in the future.

About the Continuous Mortality Investigation

Continuous Mortality Investigation Limited (‘the CMI’) is wholly owned by the Institute and Faculty of Actuaries but has an independent executive and management.

The CMI’s mission is to produce high-quality impartial analysis, standard tables and models of mortality and morbidity for long-term insurance products and pension scheme liabilities on behalf of subscribers and, in doing so, to further actuarial understanding.

The CMI’s vision is to be regarded across the world as setting the benchmark for the quality, depth and breadth of analysis of industry-wide insurance company and pension scheme experience studies.

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

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.

Members of the IFoA 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.

Members are 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 actuaries in society.

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