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The University of Southampton
Mathematical Sciences

How Long Do We Live? Developing the English Life Tables

Research undertaken by the University’s ESRC Centre for Population Change has become part of the UK’s official mortality statistics – the English Life Tables – and consequently has had wide-ranging impact in areas of healthcare, social security and life insurance.

Context

Human mortality – how long people in the UK can be expected to live, what the perspectives for the future look like, and how uncertain the estimates and predictions are – is one of the individual demographic processes the CPC has been working on.

Nurse attending to elderly patient

Research challenge

A key pillar of research by the Centre for Population Change (CPC) has been to develop robust methods for estimating current and forecasting future populations, with focus on the United Kingdom.

The key methodological innovation of the CPC’s approach is to allow mortality at different stages of human life to be described by different, but closely interconnected models. This approach, involving different levels of parametrisation depending on age, was taken up the by Office for National Statistics and applied to the 17th iteration of the English Life Tables (ELT) published on 1 September 2015.

Impact on the public sector

Several public bodies use the ELT for estimating and forecasting mortality and life expectancy. These include the Government Actuary’s Department, the Department of Work and Pensions (DWP) and HM Treasury, chiefly with respect to ensuring the stability and resilience of social security and pension systems,

The Government Actuary’s Department uses estimates of life expectancy to provide direct impact into the national pension calculations and thus to the policy decisions made by the DWP. The head of the DWP Pensions Model Development and Forecasting Hub stated that work done by University of Southampton researchers is “helping us to more accurately estimate the impact of policy changes, and hence improve decision-making”.

In addition, life tables are used by Department of Health and local health authorities, mainly for estimating the demand for health and social care.

Impact on the private sector

The ELT are widely used in insurance companies and financial services, and are also of interest to the media and the general public.

In particular, the applications in the actuarial industry are of crucial importance, as they lead to more realistic and fair pricing of life and health insurance products, such as life insurance policies or annuities.

For older age ranges where the portfolio data of an insurance company lacks reliability, relevant ELT data may be used to inform the graduation and to close-off portfolio mortality tables.

Specifically, the Continuous Mortality Investigation of the Institute and Faculty of Actuaries, who undertake research on mortality and morbidity to provide tools that are widely used by actuaries, use the ELT in their high age mortality research, as the ELT provide official figures for mortality by single year of age for the oldest ages.

The ELT also have an important role to play in reducing systemic risks within the financial system; they have been used by financial organisations as a standard by which to assess their exposure to the risks associated with changes in mortality. Such calculations are sector requirements for calculating basic solvency capital.

Key Publications

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