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Mortality assumptions (Base Mortality (*AAA
Issues when developing…
Mortality assumptions
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Ways to measure the sensitivity
1) Impact of one year increase in life expectancy (can use age setback)
2) impact of % adjustment on mortality rates
Disabled members
1) Very heaviliy select and ultime
2) Depend on definition of disability
3) Very high % of disabled members recover
Approach :
1) Use select and ultime rates
2) Some use ultimate rates for efficiency by using a multiple of ultimate rates to develop select rates
3) Some use only ultimate rates for more simplicity
4) Most don't assume recoveries to simplify.
shoul consider materiality of disabled liability before developing an approach
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Static tables warning :warning:
1) quickly outdated - need to be updated each valuation or at each change of duration
2) SC/AL allocation across different cohorts may not be appropriate