1. Mortality projections in the United Kingdom Presentation to the 15th International Conference of Social Security Actuaries and Statisticians of ISSA, Helsinki, Finland Chris Daykin, Government Actuarys Department Adrian Gallop, Government Actuarys Department

2. Period expectation of life at birth, E&W

3. Period expectation of life at age 65, E&W

4. Life expectancy at age 65 by social class, 1972-2001

5. Mortality projections for the UK The cohort effect Faster improvements have been observed for the UK generation born 1925-1945 – centred on 1931 This feature has been explicitly allowed for in GAD mortality projections since the early 1990s The CMI (Continuous Mortality Investigation) have described a similar effect in insurance and pensioner data – centred on 1926

6. Improvement in smoothed mortality rates – Males, UK

7. Improvement in smoothed mortality rates – Females, UK

8. Potential drivers for future mortality change Reduced levels of deprivation, better housing etc (+) Govt support for increasing wealth, health and incomes (+) Public support for spending on medical advances (+) Decline in smoking prevalence (+) Lifestyles (+ and -) Obesity (-) Emergence of new diseases (eg HIV, SARS) (-) Re-emergence of old diseases (eg TB) (-) Wide spread of opinion as to whether future technical, medical and environmental changes will have greater or lesser impact than in the past

9. Male mortality by major cause, E&W, 1911-2002 Age standardised mortality rates for selected broad disease groups

10. Female mortality by major cause, E&W, 1911-2002 Age standardised mortality rates for selected broad disease groups

11. Mortality Projections for the UK Setting future assumptions Estimate current rates of improvement by age and gender Set rates of mortality improvement for some future year - the target year Make assumptions on method and speed of convergence from current improvement rates to target rates, and how improvement rates change after target year

12. Mortality Projections for the UK Choosing the target rate Rates of improvement at older ages most important Standardised average rate of improvement over 20th century 1.0% pa Cohorts exhibiting greatest improvement will be aged 85- 105 in 2029! Debate as to whether future environmental, technical and medical changes will have more or less impact than up to now

13. Mortality Projections for the UK Assumptions for latest projections (2004-based) Target year is 25 th year of projection (i.e. 2029) Mortality improvements in 2029 assumed to be 1% a year for all ages for both males and females Converges more rapidly at first for males… …less rapidly for females For those born before 1960, convergence assumed along cohort After 2029 rates of improvement assumed to remain constant at 1% pa

14. Mortality Projections for the UK Projected smoothed percentage changes in death rates by age, 2003-2004

15. Annual improvement in smoothed mortality rates, Males, UK

16. Annual improvement in smoothed mortality rates, Females, UK

17. Mortality projections for the UK MalesFemales Past (Actual) Future (assumed) Past (Actual) Future (assumed) Last/next 22 years2.0%1.9%1.3%1.8% Last/next 42 years1.5% 1.3%1.4% Last/next 72 years1.2%1.3%1.2%1.3% Note: Historic estimates are based on comparison of 2002-04 Interim Life Tables with English Life Tables for 1930-32, 1960-62 and 1980-82 Actual and assumed overall annual rates of mortality improvement, E&W

18. Mortality projections for the UK Cohort expectation of life at birth (experienced and projected), E&W

19. Mortality projections for the UK Cohort expectation of life at age 65 (experienced and projected), E&W

20. Other mortality studies Continuous Mortality Investigation (CMI) Mortality data from participating life offices (since 1924) Claims (or annuities ceasing payment by death) during calendar year In force at end of calendar year Various classes of business Self Administered Pension Schemes (SAPS) investigation

21. Other mortality studies General conclusions Insured pensioner mortality lower than general population Mortality weighted by amounts lower than by lives SAPS mortality higher than in insured pension schemes SAPS mortality differential by amount

22. Other mortality studies Probabilistic/stochastic methodologies Many candidate methodologies Regression/extrapolation/smoothing (e.g. P-spline) Time-series (e.g. Lee-Carter) Projection of future life tables (c.f. term structures) What has the CMI done so far? Explored P-spline and Lee-Carter models in detail Developed software to use both the above models The CMI will contribute to research but does not expect to recommend particular models

23. Mortality projections in the United Kingdom Presentation to the 15th International Conference of Social Security Actuaries and Statisticians of ISSA, Helsinki, Finland Chris Daykin, Government Actuarys Department Adrian Gallop, Government Actuarys Department