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copy 2020 American Academy of Actuaries All rights reservedcopy 2020 Society of Actuaries All rights reservedMay not be reproduced without express permission
LIFE MORTALITY IMPROVEMENT SUBGROUP (LMISG) 2020 LIFE MI SCALE RECOMMENDATION
Life Actuarial (A) Task Force ndash NAIC Summer National Meeting 2020
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
2 copy 2020 Society of Actuaries All rights reserved
Agenda for Discussion
1 Objective for the annual mortality improvement (MI) scale updates
2 Current annual update methodology (2013ndash2019)3 Considerations for 20204 LMISG 2020 recommendation5 Future issues
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
3
Objective of Annual MI Scale UpdatesAddresses VM20 Incorporation of MI Section 9C3g
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
4
Objective of Annual MI Scale UpdatesLevel of Event Covered ndash Reserve vs Capital VM Introduction
Source VM20 ndash guidance provided on risks to be covered by reserves
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
5
Objective for Annual MI Scale UpdatesLMISG Thinking
Our annual update exercise seeks to apply judgment to historical mortality improvement (or deterioration) data to arrive at a set of mortality rates that can be used to calculate reserves for future events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
2 copy 2020 Society of Actuaries All rights reserved
Agenda for Discussion
1 Objective for the annual mortality improvement (MI) scale updates
2 Current annual update methodology (2013ndash2019)3 Considerations for 20204 LMISG 2020 recommendation5 Future issues
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
3
Objective of Annual MI Scale UpdatesAddresses VM20 Incorporation of MI Section 9C3g
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
4
Objective of Annual MI Scale UpdatesLevel of Event Covered ndash Reserve vs Capital VM Introduction
Source VM20 ndash guidance provided on risks to be covered by reserves
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
5
Objective for Annual MI Scale UpdatesLMISG Thinking
Our annual update exercise seeks to apply judgment to historical mortality improvement (or deterioration) data to arrive at a set of mortality rates that can be used to calculate reserves for future events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
3
Objective of Annual MI Scale UpdatesAddresses VM20 Incorporation of MI Section 9C3g
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
4
Objective of Annual MI Scale UpdatesLevel of Event Covered ndash Reserve vs Capital VM Introduction
Source VM20 ndash guidance provided on risks to be covered by reserves
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
5
Objective for Annual MI Scale UpdatesLMISG Thinking
Our annual update exercise seeks to apply judgment to historical mortality improvement (or deterioration) data to arrive at a set of mortality rates that can be used to calculate reserves for future events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
4
Objective of Annual MI Scale UpdatesLevel of Event Covered ndash Reserve vs Capital VM Introduction
Source VM20 ndash guidance provided on risks to be covered by reserves
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
5
Objective for Annual MI Scale UpdatesLMISG Thinking
Our annual update exercise seeks to apply judgment to historical mortality improvement (or deterioration) data to arrive at a set of mortality rates that can be used to calculate reserves for future events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
5
Objective for Annual MI Scale UpdatesLMISG Thinking
Our annual update exercise seeks to apply judgment to historical mortality improvement (or deterioration) data to arrive at a set of mortality rates that can be used to calculate reserves for future events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
6 copy 2020 Society of Actuaries All rights reserved
Most recent relevant historical MI data (10-year moving average)Historical Data
bull Age- and gender-basedbull Use of a long-term consistent source of population data Social Security Administration (SSA)
Most recent forecast of future improvements over future period (20 years)Forecasted Expectations
bull Age- and gender-based databull Consistent with historical data and projections (Alt II) available from SSA Trusteesrsquo Annual Report
Weighted average of historical data and forecasted expectationsUnsmoothed MI Scale
bull Average of historical data and forecasted expectations
Unsmoothed MI scale with smoothing process appliedSmoothed MI Scale
Current annual update methodology (2013-2019)
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
7
Preliminary 2020 ndash Current MethodologyBefore manual smoothing
-150
-100
-050
000
050
100
150
200
250
300
0 8 16 24 32 40 48 56 64 72 80 88 96 104
112
Male
Male 2020 Male 2019
-150
-100
-050
000
050
100
150
200
250
300
0 7 14 21 28 35 42 49 56 63 70 77 84 91 98 105
112
119
Female
Female 2020 Female 2019
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
8
Considerations for 2020 amp beyondbull Data - we donrsquot have sufficient data to fully understand the impact of the COVID-19-related mortality shock on
the insured population (anecdotal reports from companies indicate they are seeing a smaller shock)
bull MI scale updates - reflecting a shock in 2020 does not seem in line with the goals for the MI scale updates bull Are shock events more appropriately reflected in capital planning rather than reservesbull An effective vaccine may make COVID-19rsquos impact on MI much shorter than the long-term impact arising from the opioid
epidemicbull However COVID-19 may have potential longer-term impacts that may arise from survivor impaired health health
impacts from delays in health care andor testing for early detection of dread disease etcbull Conversely some experts and models indicate the 20202021 COVID-19 shock is mainly a moving forward of deaths that
would have occurred due to other causes andor comorbidities Might that improve future mortality improvement
bull Precedent for other excess mortality events bull First group to consider the impact of a short-term shock event ndash setting a precedent for other future MI scale workbull The current methodology uses a moving average to ldquosmooth outrdquo the impact of any one year or event bull 20082009 influenza season and the effect of the opioid epidemic ndash the methodology was not adjusted for those events
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
9
LMISG 2020 Recommendation
Apply the historical methodology for 2020 consistent with the past scale updates (2013ndash2019)
Implicationsbull There will be no specific impact included for the 2020 scale for the pandemic shock effectbull The 10-year historical average in the 2022 scale update will include a ldquosmoothedrdquo impact
of the shock as part of the usual methodology
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
10
Future Issuesbull Insured vs general population impacts
bull Some evidence that impact on insured population will be lessbull SOA ldquosocioeconomic decilerdquo study will provide some guidance herebull Consideration of consistent framework and changes to the current methodology (ex
averaging periods)
bull Will COVID-19 have a long-term impact on mortality improvement rates and what will the impact be
bull Lower due to survivor impaired health as well as the indirect effect arising from the virus delaying the early condition diagnosis of dread diseases and preventive treatments
bull Higher due to greater application of good hygienic habits (eg social distancing and washing hands) andor higher utilization of other vaccines (such as the annual flu shot)
bull Need to understand the impact in terms of potential effects on future slope and size of MIbull Impact in light of a COVID-19 vaccine availability and effectiveness
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Questions
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
copy 2020 Society of Actuaries All rights reserved
Appendix
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
13 copy 2020 Society of Actuaries All rights reserved
General PopulationPattern of excess deaths vs general mortality
AE Ratios ndash COVID-19 vs 2015 VBT Actual deaths = COVID-19
Expected deaths = 2015 Unismoke ANB 2015 VBT rates weighted by 72019 estimated US population
Slope of VBT matches COVID-19 female rates better than male rates
Small ratios gtgtgt only 1 cause of death (COD) in numerator all CODs in denominator
0904
0209
2731
4650
464647
46
1103
0506
2541
7580
6857
4657
lt1
5ndash14
25ndash34
45ndash54
65ndash74
85+
1ndash4
15ndash24
35ndash44
55ndash64
75ndash84
All Ages
Age
Grou
p
US Male
US Female
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates
copy 2020 American Academy of Actuaries All rights reservedMay not be reproduced without express permission
14 copy 2020 Society of Actuaries All rights reserved
2013-2019 MI Scale Update Reports2019 Scale httpswwwsoaorgresourcesexperience-studies2019mortality-improvement
2018 Scale httpswwwsoaorgresourcesexperience-studies20182018-mortality-improvement
2017 Scale httpswwwsoaorgresourcesexperience-studies2017mortality-improvement-2017
2016 Scale httpswwwsoaorgresourcesexperience-studies2016research-mortality-improvement-2016
2015 Scale httpswwwsoaorgresourcesexperience-studies2015research-2015-mortality-improvement-rate-year-end
2014 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-improve-rates-ag-38-year-end-2014
2013 Scale httpswwwsoaorgresourcesexperience-studies2014research-2014-mort-imp-rates