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Mortality improvement by socio-economic circumstances in England (1982 to 2006)

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  • Lu, J. L. C.
  • Wong, W.
  • Bajekal, M.

Abstract

Assessing longevity risk is crucial to the financial management of annuities and longevity-related financial instruments. Actuaries have been using socio-economic circumstances (SEC) of individuals estimated through postcodes, pension size and occupation to price annuities for prospective customers. Differences in mortality rates of people in different SEC have been discussed extensively but less is known about how their mortality rates have changed over time. A lack of regular, consistent and credible mortality data for people in different SEC has hampered the study of historical mortality trends. This in turn has made forecasting a greater challenge. To address some of these data issues, we have obtained mortality and population data between 1981 and 2007 for England, divided into SEC quintiles (measured by the relative deprivation of the area of residence according to the Index of Multiple Deprivation (IMD) 2007). Using the data, we have analysed the mortality trends by SEC. These findings can provide insight into mortality improvement for people in different SEC. This can contribute to commercial decisions for annuity businesses, reinsurance and longevity swaps.

Suggested Citation

  • Lu, J. L. C. & Wong, W. & Bajekal, M., 2014. "Mortality improvement by socio-economic circumstances in England (1982 to 2006)," British Actuarial Journal, Cambridge University Press, vol. 19(1), pages 1-35, March.
    • Handle: RePEc:cup:bracjl:v:19:y:2014:i:01:p:1-35_00
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    Cited by:

    1. Kaakaï, Sarah & Labit Hardy, Héloïse & Arnold, Séverine & El Karoui, Nicole, 2019. "How can a cause-of-death reduction be compensated for by the population heterogeneity? A dynamic approach," Insurance: Mathematics and Economics, Elsevier, vol. 89(C), pages 16-37.
    2. Börger, Matthias & Freimann, Arne & Ruß, Jochen, 2021. "A combined analysis of hedge effectiveness and capital efficiency in longevity hedging," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 309-326.
    3. Carlo Giovanni Camarda, 2019. "Smooth constrained mortality forecasting," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 41(38), pages 1091-1130.

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