Actuaries Consider Insured Population Data for Age 80+ Mortality Accuracy
Regulators and actuaries are reevaluating mortality improvement data for individuals aged 80 and older, considering a shift from general population data to insured population data. While mortality improvement rates reflect expected annual declines in death rates and are critical for life insurance and pension planning, a puzzling mortality degradation has been observed in the insured population beyond age 80. The Life Mortality Improvement Subgroup of the Mortality and Longevity Oversight Advisory Council highlights this anomaly, noting that the insured population's mortality improvement sharply drops after age 80, possibly due to impacts from the life settlements market leading to more impaired lives within insured groups at these ages.
The American Council for Life Insurers (ACLI) supports using credible and relevant data but cautions against relying solely on the worst-case mortality numbers between general and insured populations. ACLI suggests that insured individuals might have better access to treatments earlier in life, potentially resulting in a survivor population with shorter life expectancy at advanced ages. This nuanced perspective emphasizes the importance of carefully interpreting mortality data rather than drawing simplistic conclusions.
Long-term mortality trends remain complex, with persistent excess mortality noted since the COVID-19 pandemic. Research from the Swiss Re Research Institute anticipates that excess mortality could continue for up to a decade, impacting actuarial forecasts and insurance risk assessments. The Society of Actuaries (SOA) has also explored how socioeconomic factors such as income inequality and unequal healthcare access contribute to mortality disparities, with higher-income populations typically benefiting from better education and healthcare access compared to lower-income groups facing more barriers and environmental risks.
Chronic diseases, including cardiovascular disease, cancer, and diabetes, remain dominant drivers of mortality. While medical advances and lifestyle improvements previously reduced deaths from heart disease, recent trends show this progress has plateaued. Infectious diseases remain a concern, where vaccination programs have historically reduced mortality but face challenges from vaccine hesitancy and emerging viral mutations.
This evolving mortality landscape poses significant implications for life insurers, pension fund managers, and regulatory bodies relying on accurate mortality data for pricing, reserving, and risk management. Actuaries must integrate these multifaceted trends and data considerations to refine mortality assumptions and maintain robust financial models. Enhanced understanding of insured population dynamics and socioeconomic impacts is critical for forecasting longevity accurately in the post-pandemic era.