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Notes on the interpretation of “select” Rates of Mortality

Published online by Cambridge University Press:  18 August 2016

W. Palin Elderton  and
H. J. P. Oakley
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Extract

In a report on the results of an investigation of the mortality experience of life annuitants (J.I.A., vol. liv, pp. 43–90), it was pointed out that selection may be divided into “temporary selection” and “class selection.” We felt that there were two forces operating at the moment of entry or selection—(a) an initial selection based on the state of health at the time, (b) a permanent force operating throughout the whole of the after lifetime, due to the class of lives involved. The special investigation then made showed that force (a) soon worked itself out, hence the expression temporary selection; force (b) was doubtless also initial since it came into operation at entry, but it appeared to be permanent from the fact that the mortality remained light practically until the limit of life. Although the present note is the outcome of that investigation, it is not proposed to confine it to annuitants but to consider it in its bearing upon any mortality experience.

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 55 , Issue 1 , March 1924 , pp. 1 - 27
Copyright
Copyright © Institute and Faculty of Actuaries 1924

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References

page 3 note * The rates for D do not therefore enter into the calculations except to fix by interpolation the rates for years subsequent to 1900.

page 4 note * A Paper dealing with the spurious selection introduced by amalgamating tables having different mortality is pirated in J I.A., vol. xl, pp. 221–234. The Paper did not deal with the possibility of an ultimate mortality depending on date of entry, It drew attention to the difference between “old” and “new” mortality in O[M] and suggested that seven years was a sufficient period for tracing true temporary selection. On the theory developed in the present Paper this term may be reduced further. See also discussion, pp. 234–246, and subsequent correspondence, vol. xl, pp. 304–312; vol. xlii, pp. 141–144.

page 6 note * In the discussion in J.I.A., vol. liv, pp. 137 et seq., reference is made to the effect of an extended selection on “option” premiums—see also p. 136.

page 8 note * See remarks in J.I.A., vol. liii, pp. 282–4.

page 8 note † Life Assurance Companies Act in 1870—Albert and European failures about that time.