2022 death data shortens life expectancies by half a year
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Cohort life expectancies in England and Wales at age 65 are about seven months lower for men and about six months lower for women than previously projected because some allowance for death data in 2022 has been included when calibrating mortality projections, according to actuaries.
“This fall is driven primarily by putting weight on 2022 data, with updates to population estimates having a more modest impact,” said the Continuous Mortality Investigation.
This is the finding from the CMI’s latest mortality projections model, CMI_2022, which revealed a half-year drop in cohort life expectancies from the previous CMI model, CMI_2021.
Cohort life expectancies as at 1 January 2023 at age 65 from CMI_2022 and earlier versions
Standardised mortality rates in England and Wales in 2022 were on average 3% lower than in 2021, said the CMI. However, mortality in 2020 to 2022 was significantly higher than before the Covid-19 pandemic. Compared to mortality in 2019, mortality in 2020 was 14% higher, mortality in 2021 was 9% higher, and mortality in 2022 was 6% higher.
Mortality in 2022 less volatile than in 2020 and 2021
The CMI model, which used by UK insurers and pension schemes that need to make assumptions about future mortality rates, has been calibrated in a way that death data in 2020 and 2021 can be ignored or partially ignored because of the unusual mortality experience as a result of the pandemic.
The CMI said: “While mortality experience in 2020 and 2021 will affect actuarial calculations, mortality in both of those years was exceptional and is unlikely to be indicative of future mortality. For this reason, the CMI places no weight on the data for 2020 and 2021 in the core version of the model.”
However, the organisation argued while mortality in 2022 has also been higher than pre-pandemic levels, it has been less volatile and may be indicative of future mortality to some extent.
Therefore, the CMI has placed 25% weight on data for 2022 when calibrating CMI_2022 while still placing no weight on data for 2020 and 2021.
Cobus Daneel, chair of CMI Mortality Projections Committee, said: “We made this change after a consultation process and received support from users in the pensions and insurance industry. However, we still encourage users to consider adjusting the model’s parameters to reflect their own portfolios and their views of the impact of the pandemic.”
CMI_2022 delay
The CMI usually releases its mortality projections around March, but there has been a delay with the aim of using revised mid-year population estimates in 2012-2020 by the Office for National Statistics, to reflect the results of the 2021 census.
However, it said the ONS has not yet published its own revised estimates.
To avoid further delay, the CMI said: “We have used the ONS population estimates for 2021, which take account of the census, and we have revised our population estimates for 2012-2020, the period between the two most recent censuses, to be consistent with these.
“The revised population estimates for 2012-2021 account for around one month of the total 6-7 month fall in life expectancies at age 65 noted above.”
Do you think the 25% weight on 2022 mortality is fair?
