Lee-Carter mortality forecasting: a multi-country comparison of variants and extensions

We compare the short- to medium-term accuracy of five variants or extensions of the Lee-Carter method for mortality forecasting. These include the original Lee-Carter, the Lee-Miller and Booth-Maindonald-Smith variants, and the more flexible Hyndman-Ullah and De Jong-Tickle extensions. These methods are compared by applying them to sex-specific populations of 10 developed countries using data for 1986-2000 for evaluation. All variants and extensions are more accurate than the original Lee-Carter method for forecasting log death rates, by up to 61%. However, accuracy in log death rates does not necessarily translate into accuracy in life expectancy. There are no significant differences among the five methods in forecast accuracy for life expectancy.functional data, Lee-Carter method, mortality forecasting, nonparametric smoothing, principal components, state space

Lee-Carter mortality forecasting: a multi-country comparison of variants and extensions

We compare the short- to medium-term accuracy of five variants or extensions of the Lee-Carter method for mortality forecasting. These include the original Lee-Carter, the Lee-Miller and Booth-Maindonald-Smith variants, and the more flexible Hyndman-Ullah and De Jong-Tickle extensions. These methods are compared by applying them to sex-specific populations of 10 developed countries using data for 1986-2000 for evaluation. All variants and extensions are more accurate than the original Lee-Carter method for forecasting log death rates, by up to 61%. However, accuracy in log death rates does not necessarily translate into accuracy in life expectancy. There are no significant differences among the five methods in forecast accuracy for life expectancy.Functional data, Lee-Carter method, mortality forecasting, nonparametric smoothing, principal components, state space.

Mortality modeling and forecasting: A review of methods

39 page(s

Personality types of actuaries

Relatively little research has explored the personality types and interests of actuaries: the sole published study profiled North American actuaries using the Myers Briggs Type Indicator and the Strong Interest Inventory. In contrast, a number of studies of accountants have shown a clear and consistent dominance of certain personality preferences, with some authors expressing concern about the implied narrowness of the accounting profession and the possible lack of certain valued skills such as strategic thinking and persuasive communication. Personality type has been shown to be related to management, leadership and decision–making style; for example, it has been suggested that the dominance of Sensing / Concrete types in the accounting profession as a whole does not apply to those at the higher levels, who are predominantly Intuitive / Conceptual. This paper reviews what is known of the personality types of actuaries and contrasts the profiles of actuaries and accountants. The links between personality type and job satisfaction, leadership and management are explored. Finally, scope for further research and implications for the actuarial profession are highlighted.11 page(s

Understanding the age and cause drivers of recent longevity trends in Australia

Longevity continues to increase in Australia. The period 1979–2011 saw increases in life expectancy at birth of 6.9 years to 84.7 years for females, and 9.5 years to 80.2 years for males. A decomposition analysis reveals that the majority of the increase, particularly for females, is attributable to mortality improvement at older ages, and that gains are being made at increasingly older ages over time. Improvements in circulatory disease mortality account for a very significant component of life expectancy gains over the period—75 % for females and 60 % for males—with land transport accidents, congenital and perinatal mortality, and neoplasms also making significant positive contributions. Dementia and Alzheimer’s disease, and lung neoplasms for females, have had a negative impact. Females currently outlive males by 4.5 years on average, with ischaemic heart disease and prostate and other neoplasms the important positive contributors to this differential, and breast cancer having a negative effect. With 93 % of females and 88 % of males now surviving to age 65 in Australia, continued life expectancy improvements will depend to a large extent on success in delaying death at the older ages.25 page(s

The Future Aged: New Projections of Australia's Elderly Population

Objectives: To use new methodology to forecast mortality for use in projections of the elderly population of Australia and to compare them with official projections. Method: The Lee-Carter method is applied to data for Australian females and males for 1968–2000 to forecast mortality to 2031. These forecasts are used with standard population projection methods to produce projections of the elderly population. Results: By 2027, forecast life expectancy is 88.1 and 82.9 years for females and males, compared with official projections of 85.4 and 81.4 years. Over the period to 2031, the populations aged 65+ and 85+ are forecast to increase by factors of 2.3 and 3.4 respectively. Compared with official projections, the forecast elderly population is substantially larger and has higher old-age dependency ratios, higher proportions aged 85+ and lower sex ratios. Conclusion: Official projections underestimate the size of the future elderly population especially the female and oldest-old populations. This article will be published in the Australasian Journal on Ageing