IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Mortality projection
Which of the following is an example of an 'explanatory' (cause-based) approach to mortality projection, as opposed to extrapolative or process-based approaches?
Projecting mortality by modelling specific risk factors such as smoking and blood pressure and combining their effects is an explanatory approach, because it is based on the causes of death rather than on extrapolating past rates.
- AFitting a time-series model to the logarithm of central death rates by calendar year
- BProjecting mortality by modelling deaths from specific risk factors such as smoking and blood pressure, then combining themCorrect
- CFitting a parametric curve to a single year's mortality and holding it constant
- DApplying a fixed annual percentage reduction to all age-specific rates
- Using an expert opinion on the long-term rate of improvement
Explanation
Explanatory methods relate mortality to its causes or risk factors, such as smoking, and project those factors. Time-series fitting and fixed reductions are extrapolative, and expert opinion is a different approach.
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