Mortality curves are a critical ingredient for the valuation of any longevity-related product (for example, pensions, life insurance, reverse mortgages). Typically, several statistical agencies provide mortality curves differentiated on gender per country. However, it has been documented that people’s mortality prospects differ beyond their differences in gender. Income, education, job type, etc might all have an impact on mortality. In this online training, we present 1) how such distinctive characteristics can be considered in a mortality model, 2) empirical results (based on Belgian data) and 3) the implications for retirement products valuations. Though the empirical results are based on Belgian data, many results are qualitatively in line with other European countries.
The goal of the session is to clarify the impact of various socio-economic factors on mortality and its impact on the valuation and risk-management of retirement products. At the end of the session, people will have a good understanding of
1) Impact of socio-economic status on mortality rates
2) Impact of differences in mortality curves on product valuations
3) Adjusting mortality models to take socio-economic factors into account.