Longevity modelling crucial for world's financial systems and UK plc

• £60 billion could be added to pension scheme deficits if pensioners live just one year longer than assumed
• Research in Ireland shows financial crises, such as the 2008 crash, have direct effect on mortality rates with suicides rising significantly for ages 25 to 44
• 70% of post-1970 rise in life expectancy due to drop in circulatory diseases and stroke

The Institute and Faculty of Actuaries’ (IFoA) Longevity Bulletin on Mortality, released today (18 November), highlights the significant impact longevity modelling has for the world’s financial systems and UK plc. The report highlights the importance of longevity modelling by showing that a staggering £60 billion could be added to pension scheme deficits if pensioners live just one year longer than assumed, showing how important it is for longevity modelling to be as accurate as possible.

Articles in the bulletin show how modelling can be used to more accurately track longevity trends.  For example the finding that 70% of post-1970 rise in life expectancy is due to a drop in circulatory diseases and stroke will help policy makers looking at the roles of risk factors and medical treatments on longevity.  Articles also discuss the significant impact the economy can have on the longevity of different age groups and uses the Celtic Tiger of Ireland* as a case study following the 2008 financial crash.

This regular bulletin brings together research and analysis on the drivers of longevity trends and different types of mortality modelling into one place for policy makers and other professionals who work with longevity, ageing and population change.

Fiona Morrison, President of the IFoA, comments,

“With the significant improvements in longevity seen over the last century, this issue of the IFoA’s Longevity Bulletin discusses longevity improvement trends and modelling approaches that are being developed to project future mortality rates.  Understanding of the factors affecting future longevity, such as lifestyle, medical advances, and health care policy, are of critical importance for the world’s financial systems and UK plc.”

~ENDS~

*Ireland’s economy experienced record growth during the so called “Celtic Tiger” years from the mid 1990’s to 2007 with average GDP growth of almost 10% pa and 5.5% pa for the periods 1995-2000 and 2001-2007 respectively (Dept. of Finance, Ireland 2011).

Download the Longevity Bulletin

Contact:

Annette Heninger, Media Relations Manager
Tel: 07525 592 198
Email: annette.heninger@actuaries.org.uk

Editorial notes:

About the Longevity Bulletin

The IFoA’s annual Longevity Bulletin was first issued in 2011, and was created as an overview of longevity trends.  The aim of this, the 7th issue, is to improve understanding of longevity trends and modelling by discussing drivers of longevity improvements and characteristics of two broad families of models.

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.

The IFoA is available to provide independent 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.