IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Mortality projection
Which is a recognised criticism of the 'explanatory' (cause-of-death) approach to mortality projection?
A key criticism is that cause-specific modelling needs many hard-to-justify assumptions about each cause of death, and the interactions between causes are difficult to capture, so reliable projections are hard to produce.
- AIt cannot use any past data
- BIt ignores medical knowledge about the causes of death
- CIt requires cause-specific assumptions that are hard to make, and the interactions between causes are difficult to modelCorrect
- DIt always produces narrower forecast intervals than extrapolative methods
- It assumes mortality rates will never improve
Explanation
The explanatory approach models mortality via causes such as heart disease or cancer, using medical knowledge. Its difficulties are the need to assume cause-specific trends and the interdependence between causes, so it is hard to apply reliably.
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