I’m wondering specifically about mortality data for the various rate classifications and how they relate to the specific underwriting factors such as health history, tobacco use, height/weight, family history, avocations, etc.
Are there mortality tables for practically every medical condition, and for every degree of that condition? Likewise for the various non-medical factors, eg. aviation, hazardous sports, substance abuse, travel to dangerous places?
How’s the data compiled? Do companies rely mainly on their own mortality experience or on external data?
Do actuaries take all the data into account in complex statistical models, or is it simpler than that (eg. based mainly on competitive position)?
Thanks.
Well, I *thought * there were some actuaries here …
Bump.
There are a couple of actuaries here, but I don’t know that we have anyone in life. You might be better off asking over here.
I haven’t worked in life insurance for a while (twelve years or so) and thus my comments are probably a bit out of date. And insurers’ practices will differ depending upon the amount of internal mortality/morbidity data available to them.
We used to use industry insured lives tables for our basic mortality/morbidity assumptions. These are tables that have been compiled after pooling the mortality/morbidity experience of all those insurers that are willing to participate. These tables would capture the effects of the obvious factors (sex, smoker status, occupation class). If the industry tables were getting dated we’d generally make some allowance for improvements in mortality/morbidity.
To allow for the effects of other health issues (weight, family history etc) or hazardous occupations or hobbies we tended to rely on rating factors provided by our reinsurers, since they had access to far more data. It wasn’t a particularly scientific process and considerations of competition were always important.