Actuarial Concept Series — #8

ActuarialAssumptions

Mortality and Longevity assumptions are derived from the company’s experience with that product or type of product. Other data sources can be used to derive or justify the base assumptions derived from the company’s own data.

To derive it, Actuaries would consider:
- Company experience over the past 3 to 5 years;
- Policyholder age and gender;
- Duration inforce, where mortality is likely to be lower for some years after the policy is underwritten;
- Source and mix of business, where this may influence expected mortality;
- Reinsurance rates, particularly for large schemes;
- Appropriateness of standard tables, and any adjustments made to these;
- Level underwriting applied to the product;
- Whether the product is paying premiums, or premiums have ceased;
- If material amounts of business are written in more than one country, then the country of residence or nationality should be considered.

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