We are a team of qualified actuaries specialising in building bespoke mortality and morbidity tables in developing and emerging countries. We collaborate with local consultancies on projects, where their understanding of local conditions is vital to the success of a project.

Many developing and emerging countries typically use out-of-date life tables from countries with more developed markets for modelling life expectancy, but this approach is very unlikely to reflect the likely lifespans of the local nationals particularly well.  Building up-to-date and relevant life tables is something that the World Bank recommends, and is considered to be international best practice.

Benefits to social security schemes

Building bespoke local mortality tables can help social security schemes better estimate, and budget for, their future liabilities. 

They are an important ‘building block’ for better understanding the current position and forecasting.  Without accurate and up-to-date underlying statistics:

  • pensions systems cannot be modelled accurately,
  • contribution levels and cashflow forecasts will be less reliable, and
  • social security systems may be less sustainable.

Up-to-date bespoke tables will ensure that ‘black holes’ are less likely to develop in the pension system’s finances in the future, which could otherwise result in a need for benefit reform; alternatively, they will ensure that excess funds can be redirected elsewhere in Government budgets.   

Accurate morbidity tables can allow better projections for illness rates, which can ensure more accurate costings for ill health and disability benefits. 

Benefits to the life insurance sector

Bespoke mortality tables are also a key building block for the life insurance industry. 

Key benefits of robust local tables for the life insurance and private pensions sectors are that they will:

  • reduce the need for risk loadings included in premium pricing thereby improving the affordability of insurance and enhancing product development;
  • allow more accurate actuarial modelling, which will better protect policyholders;
  • increase credibility in the industry; and 
  • stimulate competition, which will bring growth to these sectors.

Our services

We can provide support in the following areas:

1.   Independent critique of existing mortality tables:

  • Review of overall shape, including any unusual patterns or anomalies in the deaths or exposure, and comparison with other datasets
  • Analysis of calculations and methodology used to calculate crude mortality rates
  • Analysis of the graduation methodology used and discussion on its validity and potential downfalls
  • Analysis of the techniques adopted for extending the graduated mortality rates to young and old ages; and
  • Comparison of mortality curves from related datasets, to check how they behave in relation to each other e.g. curves produced for high and low earners

2.   Advise on data needs including future data storing and gathering techniques

3.   Build mortality, and morbidity, tables

  • Support the data gathering exercise, and carry out data cleansing and data analysis
  • Calculate, and graduate, crude mortality and morbidity rates, and
  • Produce tables for all ages, and for sub-groups of the population

4.   Provide technical training to ensure new mortality and morbidity tables are fully understood and used correctly. 

5.   Advise on techniques for projecting mortality rates into the future.

When building bespoke mortality tables we use the highest international standards in our analysis. 

Our experience

Barnett Waddingham’s specialist longevity team is at the forefront of mortality and morbidity research and modelling in the UK. 

We undertake assignments for a wide variety of clients – insurance / reinsurance companies, international governmental organisations and pension schemes.  In particular, we have supported the Institute and Faculty of Actuaries’ mortality research arm (the Continuous Mortality Investigation, or CMI) for over 25 years. 

The CMI has a long history of providing authoritative and independent mortality and sickness rate tables for UK life insurers and pension funds.  Its vision is to set the benchmark for the quality, depth and breadth of analysis of industry-wide insurance company and pension scheme experience studies across the world.

On behalf of the CMI, we collect and analyse data from UK insurance companies and pension schemes and support the production of tables of mortality, critical illness and income protection experience.  Through carrying out this role, we have naturally become experienced in CMI techniques and indeed in some cases advise the CMI on the techniques themselves.

CMI work is extensively used by actuaries across the UK, and in many parts of the rest of the world.  

Other prominent ongoing clients include the Life and Longevity Markets Association in the UK, for which we produce four annual longevity indices (namely England & Wales, Germany, the United States and the Netherlands). 

Working together with Callund Consulting, we recently finalised the development of the first mortality tables in Rwanda based on pensioner and assured lives.  This was done for the Association of Insurers of Rwanda (ASSAR); National Bank of Rwanda (BNR) and the Ministry of Finance (MINECOFIN) as an industry-wide initiative. 

We have also recently completed building the first ever set of bespoke mortality tables based on the population of Kazakhstan, for the United Accumulative Pension Fund, where we also carried out detailed technical mortality training.

The Issue

Rwanda had historically been using mortality tables developed in 1960-1964 for Europe or East and Western Africa, as no bespoke Rwandan life tables existed. The Rwanda Financial Sector Development Program recognised the need to increase access to financial services in Rwanda, particularly insurance and pension services to enhance and increase long term savings as a key poverty reduction strategy.  One of their priority actions to help achieve this was to develop Rwanda-specific mortality tables.

Work Carried Out

In collaboration with Callund Consulting Limited, we collated data from the Rwanda Social Security Board for the years 2012-2016 and data from local life insurance companies over a similar period (2012-2015). We analysed and ‘cleansed’ this data and produced crude mortality rates.  Combining these crude mortality rates and Rwandan population data allowed us to produce smoothed life tables, for all ages.

Particular challenges included developing sensible approaches where data was limited or appeared unreliable, such as at younger and older ages.

Deliverable and Benefit to Rwanda

This is a great milestone for Rwanda, as these tables will ensure that life and annuity products are more accurately priced and reserved for, in the Rwandan life insurance and pensions sectors.

These tables are now being used by insurance companies for pricing and reserving life assurance products as well as by pension funds to manage their liabilities;

We also provided recommendations that would improve the value of a future exercise.

The Issue

No bespoke full mortality tables had ever been produced for the population of Kazakhstan and the national pension system was using out-of-date mortality tables based on US lives’ experience for its calculations.  It is particularly important to be able to accurately calculate average life expectancy figures in Kazakhstan, because these calculations affect the age to which the pension from the United Accumulative Pension Fund (UAPF) is paid.

Work Carried Out

Individual data was collected from the State Pension Payment Centre, which covered virtually all lives in Kazakhstan (regardless of their employment status) covering the period 2010 - 2016.  The data was ‘cleansed’ and analysed, and crude mortality rates were produced.  There were a number of abnormalities in the dataset, which were discussed with the client before producing the graduated mortality tables for all ages, to ensure that their views on the most likely causes of these abnormalities were taken into account in the graduation.

Detailed technical mortality training was also provided to the actuarial team at the UAPF and employees of the National Bank.

Deliverable and Benefit to Kazakhstan

This was the most robust and detailed mortality study ever carried out in Kazakhstan and the first-ever based on individual data records for virtually all the population.  The bespoke Kazakhstani mortality tables will allow revised pension ages to be calculated by the UAPF with greater confidence.  Furthermore, the use of international experts is expected to give other stakeholders in Kazakhstan more confidence in the tables.  

The new mortality tables will also enable the UAPF to better estimate, and budget for, their future liabilities in their actuarial reviews.

Our training helped to build in-country capacity, to enable the teams to use the tables and to help them to put systems in place such that in the future, the mortality tables can be updated regularly in-country, reducing the need for external consultants.