Lexicon of Longevity

The phenomenon of increased mortality rates for people in their late teens and early twenties in a given population.

The ratio of actual deaths in a specific population to those predicted by a defined mortality table.

A common way to analyze historical mortality improvements is to break them down into three components: age, period and cohort. Age effects reflect the fact that progress in reducing mortality may be concentrated amongst certain age groups.

A crude way of tailoring a base table to fit the characteristics of a particular population, by shifting the rates up or down by one or more years.

The process of calculating average mortality rates using weightings based on a standard reference population.

A common way to analyze historical mortality improvements is to break them down into three components: age, period and cohort.

The process of deterioration of the physical condition of a living organism that ultimately leads to death.

A goodness of fit model often used in longevity modelling.

The transfer of risk without using traditional insurance products. In respect of a pension plan’s longevity risk, an alternative risk transfer would be any transfer of risk without the purchase of annuity contracts covering the individual participants of the plan.

A financial instrument offered by an insurance company that pays a regular income to the recipient either for the rest of their life (a lifetime annuity) or for a fixed period (a fixed term annuity).

A large Y-shaped blood protein produced in response to and counteracting a specific antigen, such as bacteria and viruses. Determining whether someone has an antibody particular to a certain virus is done by a “serology test.” Determining what proportion of a population has antibodies to SARS-CoV-2 is important in separating the IFR from the CFR.

People born between the mid-1940s and mid-1960s.

A set of age-specific rates of assumed mortality (or survival), intended to represent a snapshot of mortality at a specific point of time in a given population without any allowance for future variation.

The reference year for a base table.

A snapshot of current longevity captured by a base table.

A model used to calculate baseline longevity (a snapshot of current longevity), usually in the form of a base table.

When calculating the longevity for a given population, this is the risk of how much the given population differs from the population used to calculate the baseline longevity assumption.

A goodness of fit model often used in longevity modelling.

The measure of how old a person seems, allowing for the fact the aging of the body takes place at different rates for different people depending on genetic and environmental influences.

An ageing theory which postulates that humans (along with other species) have a natural limit to their lifespans that cannot be exceeded.

A group of people from a given population defined by the time of their birth.

A distinction of different types of workforce commonly used as a ratings factor in the United States.

An insurance offering popular with pension plans where a portfolio of annuity contracts is purchased to cover a group of participants of the plan.

The purchase of bulk annuities by a pension plan resulting in the insurance contracts remaining as plan assets.

The purchase of bulk annuities by a pension plan resulting in passing all the governance and control of the assets to the insurance company.

A mathematical model for projecting historical trends in mortality improvements into the future.

A French woman from Arles, born in 1875, who is the oldest recorded human with, a lifespan of 122 years and 164 days.

A series of standard tables published by the Canadian Institute of Actuaries as part of the Canadian Pensioners’ Mortality study.

In epidemiology, the Case Fatality Rate of a disease is the percentage of known cases of a disease that cause the patient to die. It is equal to the number of people known to have died from the disease divided by the number of known cases of people having the disease. In other words, the numerator is the total number of people known to have died from the disease. The denominator is the total number of known cases of the disease.

A longevity projection model that aims to predict the future changes to mortality rates by modeling the changes in the underlying causes of specific causes of death.

The reason recorded for the death of a given individual. Studying common causes of death and the changes in their occurrence within a population can help us understand how longevity may change in the future.

A longevity projection model that aims to predict future changes to mortality rates by modeling the changes in causes of death.

The Center for Disease Control and Prevention (CDC) is a United States federal agency under the agency of the Department of Health and is the leading national public health institute of the US.

Chronological age is age measured as time elapsed since the date of birth.

1. A center of excellence for improving the understanding of human longevity.
2. A community of organizations with a shared interest in longevity and a belief that the ‘bigger’ the data, the lower the (statistical) noise.
3. A provider of longevity risk informatics to support pension plans’ risk management strategies and enable market innovation.

A technique used to cluster together values of a rating factor into groups exhibiting similar characteristics , so that the differences between groups become statistically significant.

A ‘library’ of mortality projections compiled by the Continuous Mortality Investigation in the UK up to 2014.

A deterministic model developed in the UK by the Continuous Mortality Investigation for projecting mortality rates into the future. (Often abbreviated to “the CMI model”).

A group of people from a given population that share a common time period for some event (such as birth or retirement).

A common way to analyze historical mortality improvements is to break them down into three components: age, period and cohort. Cohort effects relate to the unique experience of a particular birth cohort.

Life expectancy determined using projected death statistics for one particular birth cohort and generally assuming future changes in death rates (typically a reduction, often referred to as an ‘improvement’).

A form of security offered by a counterparty in an ongoing transaction, where the value of promised payments can vary due to external events.

The compensation law of mortality (or late-life mortality convergence) states that the relative differences in death rates between different human populations decrease with age.

The ongoing effect resulting in the narrowing of the range of ages over which most individuals die.

This is a measure for how concentrated longevity risk is among individual members of a given population.

An organization run by the UK actuarial profession that collates mortality data from UK insurers and UK pension plans and produces mortality tables.

Coronaviruses are a type of common virus found in different animals. There are many different kinds of coronaviruses, some causing colds and mild respiratory illnesses while others can cause more serious illness including severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS). Only seven coronaviruses are known to cause disease in humans.

When entering into a transaction with another party, that party is known as the counterparty to the transaction.

When entering into a transaction, there is a risk that the counterparty does not meet its contractual obligations (for example, they fail to make a payment at the required time). This risk is known as counterparty risk.

A rating factor which is allowed to vary simultaneously in a longevity model, used to differentiate between individuals with different characteristics.

COVID-19 is the disease caused by the new coronavirus that emerged in China in December 2019. COVID-19 symptoms include a deep, dry cough, fever and shortness of breath. In rare cases, COVID-19 can lead to severe respiratory problems, kidney failure or death.

A Canadian scale of future mortality rate improvements published by the Canadian Institute of Actuaries as part of the Canadian Pensioners’ Mortality study.

An experience analysis of a pension plan’s (or an insurance book’s) historical longevity data used to adjust standard tables to bring them more in line with a pension plan’s observed experience.

A statistical theory used to combine multiple estimates from different sources when predicting future events.

Aubrey de Grey is an English author and biomedical gerontologist. He is famous for his view that medical technology may enable human beings alive today to avoid death from age-related causes.

Generally, a mortality rate, or death rate, is a measure of the number of deaths in a given population of a given time period. The term is also commonly used by actuaries to refer to the probability of dying within the following year.

The change in the types of people making up given population (such as the employees of a given company) over time.

The study of populations, and in particular the profile of populations (for example by age, gender, socio-economic group, ethnicity, etc) and how these profiles are changing.

A mathematical model used to model the transmission of an infectious disease.

A disease occurring frequently in a specific population / region.

The sudden outbreak of an infectious disease which spreads rapidly, affects a large proportion of people and is geographically contained.

Epidemiology is the study of the distribution and drivers of different health conditions (including but not limited to diseases) within certain populations, i.e., how diseases occur and why.

A measure of how many more people in a given population die in the winter months (usually defined as December-March in the Northern Hemisphere) compared to the average for the rest of the year.

The expectation of life is the length of time (generally measured in years) that an individual can expect to live. It is sometimes referred to as ‘life expectancy’.

An assessment of actual mortality rates of a group of lives against those predicted by a standard table (such as SAPS tables in the UK, Pri 2012 or Pub 2010 in the US or CPM tables in Canada) or a rating factor model (such as VitaCurves).

The number of individuals within a specified population who are ‘at risk’ of a specified event occurring to them or in relation to them.

In a pension plan or an annuity contract, a first life refers to the individual who is initially entitled to payment.

A series of fixed payments exchanged as part of a longevity swap.

A financial instrument offered by an insurance company that pays a regular income to the recipient for a fixed period.

The process of the number of people infected by a disease being spread out over a longer time period than initially predicted.

A series of variable payments exchanged as part of a longevity swap.

The projected reduction of mortality rates in the future. 

A projection model that projects levels of improvements to mortality rates into the future.

The Group Annuity Mortality (GAM) and Group Annuity Reserving (GAR) tables are a series of standard tables in the US used for assessing baseline longevity for solvency purposes.

Leonid Gavrilov and Natalia Gavrilova are prominent bio-demographers who applied the principles of reliability theory (the study of the failure of industrial systems) to human biology.

A mathematical model used to predict the outcome of a future event that follows the pattern of a specific statistical distribution.

People born in and living through the same period are often thought to share certain characteristics. Here is a list of generations and some of their characteristics for people born after the mid-1920s.

People born between the mid-1960s and late-1970s who grew up during a period of social transition with the end of the Cold War.

People born between the early-1980s and late-1990s. 

People born after the late 1990s (no end date has emerged yet). Sometimes referred to as the i-generation.

The description of people according to where they live. Such descriptions are widely used in the world of market research.

A medical term: geriatric medicine refers to the clinical, preventive and social aspects of illness in older people.

The study of aging in humans.

The effect that UK retirees born around 1926 live longer lives than those born earlier or (immediately) later.

A British mathematician, actuary and Fellow of the Royal Society. His work on mortality tables led him in 1825 to develop his law of human mortality – known as the Gompertz curve.

The goodness of fit of a statistical model is how well the model fits a set of observed data.

The mathematical process of ironing out bumps in observed mortality rates at individual ages to produce smoothed mortality or survival curves.

The effect of mortality rates generally being higher for a surviving contingent second life (usually a spouse) than for the first life.

An insurance offering popular with pension plans where a portfolio of annuity contracts is purchased to cover a group of participants of the plan.

A prominent scientist of his day, now most famous for his comet. He also made a vital contribution to actuarial science, being the first person to publish life tables based on sound demographic data.

A theory of longevity improvements, where healthy behaviours are first adopted by more comfortable socio-economic groups (due to better opportunities and education). These behaviours then ‘cascade’ through society with less fortunate socio-economic groups adopting them later.

The number of years an individual is expected to live in good, or fairly good, health.

Hedging is a broad concept that involves using opposite exposures to a risk to reduce the effects of that risk.

Herd immunity is a form of protection from an infectious disease where enough people in a given population are immune to stop the continued spread of the disease.

A term commonly used in statistics, meaning ‘containing diverse and different items’, or ‘displaying different characteristics'.

Homogeneous means ‘containing identical items’, or ‘displaying identical characteristics’.

A goodness of fit model often used in longevity modelling.

The risk that certain members of a population live significantly longer (or shorter) lives than that predicted, driven by the natural variation in a population (where some people may just be (un)lucky with how long they live).

The reduction of mortality rates over time. Usually refers to reductions that are projected to happen in the future.

A term used to describe the current state of a longevity swap. It is in the money for a particular party if they would gain financially if it was settled at that point in time.

The period between exposure to a disease (leading to infection) and the appearance of symptoms.

An indemnity swap is the term for a longevity swap where the ‘actual’ mortality rates are determined by the experience of a specified population.

A UK government qualitative study of deprived areas in English local councils (with similar measures produced for Scotland, Wales and Northern Ireland).

An index-based swap is a type of longevity swap that uses the experience of a standard ‘index’ population to determine the ‘actual’ mortality rates.

A parametric risk transfer where the longevity risk that has been transferred relates to a given longevity index.

The risk that certain members of a population live significantly longer (or shorter) lives than that predicted, driven by the natural variation in a population (where some people may just be (un)lucky with how long they live).

An industry effect is when people working in a specific industry experience significantly different mortality rates than people with similar characteristics (i.e., similar rating factors) working in other industries.

In epidemiology, the Infection Fatality Rate (IFR) of a disease is the percentage of people infected with the disease that are expected to die. 

The period during which a person can pass on a disease.

An advanced parameter of the CMI mortality projections model that was introduced in the 2018 model, which allows users to alter short-term rates.

In an insurance transaction, an intermediary is an entity which acts as a middle party between the party transferring the risk and the party ultimately taking on the risk.

The practice of separating people symptomatic of a certain disease, allowing them no contact with people who are susceptible of contracting the disease. 

A traditional Scottish saying to wish someone a long and healthy life. 

The law of large numbers shows that the average of the results of a large number of experiments should be close to the expected value of the experiment and will become closer to the true value as more trials are performed. Essentially, more data will result in better estimates.

The Lee-Carter model is a mathematical model for projecting historic trends in mortality improvements into the future.

Life expectancy, or the expectation of life is the length of time (generally measured in years) that an individual can expect to live. It is also referred to as ‘expectation of life’.

A life settlement is the sale of a life insurance policy before the death of the insured party.

A table containing the number of people that survive to any given age in any given year, starting from a reference population in a given start year.

A financial instrument offered by an insurance company that pays a regular income to the recipient for the rest of their life.

Likelihood is a statistical measure of how likely the observed data is under the fitted model.

A mathematical transformation commonly used in longevity modeling.

A rate of longevity improvement used in some projection models to reflect a long-term sustainable rate of reduction (improvement) to mortality rates.

In general usage, longevity is often used to refer to long (or longer than expected) life. However, actuaries and demographers generally use ‘longevity’ as the converse of mortality.

A black swan is an event or occurrence that deviates significantly beyond what is normally expected and that would be extremely difficult to predict. A longevity black swan is such an event relating to life expectancy.

A longevity bond is a fixed income investment whose payments to investors (regular “coupons” and/or termination payment) are linked to the survivorship of a specified underlying population. Examples include Swiss Re’s Kortis Bond (2010).

Longevity escape velocity is a hypothetical situation in which life expectancy is improving at a faster rate than people are ageing.

A longevity index is a method to track the survivorship of a specified population in a standardized way. 

A published longevity index could be used to determine standard terms for traded longevity derivatives such as longevity bonds, longevity swaps or longevity swaptions.

A that allows the original payer of the floating leg of the underlying longevity swap the option to pay the fixed leg and receive the floating leg.

A swaption that allows the original payer of the fixed leg of the underlying longevity swap the option to pay the floating leg and receive the fixed leg.

The risk that a given individual or population will live longer than expected (in particular leading to negative effects).

A class of special financial instruments enabling two parties to exchange payments depending upon the actual mortality rates experienced by a particular population.

A longevity swaption is a derivative contract allowing the owner the option (the right but not the obligation) to enter into an underlying longevity swap.

The changes to the longevity of individuals in a certain population over time.

The process of obtaining medical or health information for a given population to give a better estimate of how long they will live.

A bulk annuity contract completed after applying medical underwriting to more accurately reflect the mortality of the individuals covered by the contract.

A process of completing a mortality study for the population of a specific pension plan using medical underwriting.

Methuselah was a biblical figure said to have died at the age of 969, the longest lifespan mentioned in the Bible. His name has become synonymous with longevity.

A set of mortality improvements published in 2017 by the Canadian Institute of Actuaries.

People born between the early-1980s and late-1990s. Also known as generation Y.

A minimum level of ongoing mortality improvements assumed to take place in the future.

The slowing of the rate at which a disease is spread, usually with the aim of reducing the peak demand on healthcare systems and the protection of those most at risk from the disease.

Morbidity refers to the state of being sick or disabled, and to the incidence or prevalence of sickness or disability.

In general, the term mortality refers to the susceptibility to death. When actuaries refer to mortality they use it to mean the likelihood of death.

The reduction of mortality rates over time. Usually refers to reductions that are projected to happen in the future.

Generally, a mortality rate, or death rate, is a measure of the number of deaths in a given population of a given time period. The term is also commonly used by actuaries to refer to the probability of dying within the following year.

The risk that a given individual or population will not live as long as expected (in particular leading to negative effects).

An alternative term for longevity swaps.

A set of mortality rates defined for each age, usually spanning ages 0 to 115 or 120.

The MP improvement scale is a projection model widely used by pension plans in the US. 

A branch of mathematical statistics that helps to identify the strength of relationships and inter-dependencies in bodies of data that include many covariates.

A term for social and behavioural interventions aimed at stopping the spread of an infectious disease.

The Office for National Statistics is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the UK Parliament.

An American bio-demographer and gerontologist. He argues that human longevity has already reached its upper limits and has little room for further gains.

A longitudinal study of the England and Wales population run by the UK’s Office for National Statistics.

A term used to describe the current state of a longevity swap. It is out of the money for a particular party if they would lose financially if it was settled at that point in time.

The localized rise in a specific infectious disease.

A cognitive bias whereby the outcome of an event shapes our view of previous decisions relating to the event.

The production of a statistical model that fits too closely to a given set of data.

P-splines are a mathematical tool which are used to analyze and extrapolate trends in historical mortality.

An epidemic so widely spread that vast numbers of people in geographically dispersed areas are affected (can only be declared by the World Health Organization)

A parametric risk transfer is an insurance contract or Alternative Risk Transfer that does not cover the entire loss in the event of a pay-out.

The parsimony principle for a statistical model states that: a simpler model with fewer parameters is favored over more complex models with more parameters, provided the models fit the data similarly well.

A pass-through structure is a type of intermediation (see intermediary). Under this structure, any longevity risk, counterparty risk or other financial risks are not retained by the intermediary.

The act of transferring risk from a pension plan to another institution, usually an insurance company.

A common way to analyse historical mortality improvements is to break them down into three components: age, period and cohort. Period effects relate to factors that affect all age groups at a particular time.

Life expectancies that are determined based on mortality rates for one particular period with no allowance for any future changes in mortality rates after that period.

An advanced parameter of the CMI mortality projections model used to alter the weight of recent experience on short term rates.

A popular type of chart used to depict the age and gender structure of a population.

A particular type of rating factor model used in Canada which uses postal codes as a rating factor to reflect different longevity experience for people living in different areas.

A particular type of rating factor model commonly used in the UK which uses postcodes as a rating factor to reflect different longevity experience for people living in different areas.

Premature death is effectively death resulting from something other than old age. Causes of premature death include disease (e.g. cancer, heart disease), murder, suicide and malnutrition.

A set of standard tables produced by the Society of Actuaries in the US in 2019 based on data from private sector retirement plans (including both single employer and multi-employer plans).

A model for projecting changes (usually levels of improvements) to mortality rates into the future.

Any means taken to prevent disease. 

Including vaccination, social distancing, quarantine and isolation.

A set of standard tables published in the US by the Society of Actuaries based on data from private sector retirement plans (including both single employer and multi-employer plans).

Quarantine is the practice of separating people who are asymptomatic of a disease in order to assess whether they fall ill from the disease. 

The actuarial notation for the 1 year mortality rate at age x.

A rating factor is a characteristic that could potentially be used to identify different mortality rates between individuals.

A particular type of baseline model which uses rating factors to reflect different longevity experience for people with different characteristics.

The ongoing effect resulting in the narrowing of the range of ages over which most individuals die.

A statistical hierarchical clustering algorithm used to group together values of a rating factor into groups exhibiting similar characteristics and so that the differences between groups become statistically significant.

A statistical model for estimating the relationship between a dependent variable and a set of covariates. 

A reinsurer is an insurer for insurers.

In the context of mortality risk, relative risk refers to the increased (or decreased) chance of dying of a certain group compared to another group.

Reliability theory derives from a subfield of mechanics: where the failure of too many parts of a machine leads to the failure of the machine itself. In the context of longevity modeling, the machine is the human body, and its failure is death.

The reproduction number (R₀, generally pronounced “R naught”) of a transmissible disease is the number of people to whom one carrier will transmit the disease during their infectious period.

A Society of Actuaries committee responsible for the ongoing reporting of mortality and other experience of pension benefits provided directly by employers. RPEC is responsible for producing the series of Pri 2012 and Pub 2010 tables and the MP improvement scale projection model.

Ring immunity is a form of protection from an infectious disease where a ‘ring’ of immune people is created around each infected individual to stop the spread of the disease.

A series of standard tables produced by the Society of Actuaries in the US, based on data from uninsured pension plans and widely used for assessing pension plan baseline mortality.

The standard tables published by the UK’s CMI, based on the data collected from its Self-Administered Pension Scheme (SAPS) mortality investigation.

A crude way of tailoring a base table to allow for the characteristics of a particular population, by multiplying the mortality rates by a scaling factor (for example 90% or 110%).

A risk management technique applied to longevity risk where the outcomes of accessible, descriptive scenarios are modeled to assess their overall impact on future longevity and knock-on effects to pension plan or insurer liabilities.

In a pension plan or an annuity contract, a second life refers to an individual (usually a spouse or civil partner) who is entitled to payment in the event of the death of the first life.

A particular form of mortality table that is used for sub-populations that have been selected in some way.

The investigation run by the UK’s CMI into mortality experience for large self-administered pension schemes, pooling data from some of the largest pension plans in the UK.

Senescence is the scientific name for ageing and relates to the biological processes which take place in individuals at older ages.

The official name for the coronavirus causing the disease COVID-19. It originally emerged in Wuhan, China in December 2019 and is currently causing a worldwide pandemic.

Three different cohort projections produced by the Continuous Mortality Investigation, each projecting the future of the ‘golden cohort’ differently (with short, medium and long effects).

A reinsurance structure designed to allow capital to be invested in longevity risk by external investors.

People born between the mid-1920s and the mid-1940s; the term is believed to refer to the focus of this group on careers over activism.

A pension risk transfer structure popular in the US where the benefits of retirees with the smallest pensions are secured with an insurance company.

The reduction in social contact between people of a given population to reduce exposures to an infectious disease.

In the context of longevity, it is any grouping by social or economic factors that could lead to homogeneous groups with different longevity experience.

A published mortality base table, usually constructed using a large data set believed to be relevant to a number of users.

Statistics Canada is the Canadian government agency commissioned with producing statistics to help better understand Canada, its population, resources, economy, society, and culture.

A rating factor used to segment an underlying population to develop separate longevity models for different groups. 

A risk management technique applied to longevity risk where the effect of a given change or ‘stress’ to longevity is measured.

The reversal of the spread of an infectious disease with the reduction of case numbers to a manageable level and an indefinite maintenance of these levels.

A branch of statistics that analyzes the expected amount of time until one or more events happen.

A statistical graph of the survival experience or expectation of a population, showing the proportion surviving (or expected to survive) by age, or over time.

Someone with a disease is said to be symptomatic if they exhibit symptoms of the disease. They are said to be asymptomatic if they do not.

In statistical theory, tail risk is the risk of an extreme or unlikely event. 

A life insurance product that pays out in the event of death within a specified time period (referred to as the ‘term’).

The availability heuristic is the reliance on examples that immediately come to mind when forming an opinion.

A long-term data set on the dynamics of health, social, wellbeing and economic circumstances in the English population aged 50 and older.

An early form of investment vehicle that combines features of a group annuity, group life assurance and lottery.

A process common in the UK of buying annuity policies for retirees with the highest pensions in a pension plan. The aim is to reduce the concentration of risk and the idiosyncratic risk in the pension plan.

The risk that mortality rates decrease (or increase) at a different rate to that assumed, resulting in people living for different lengths of time than predicted.

The ultimate age of life table or longevity base table is the age at which q_x is set to 100%. There is not conclusive evidence for an age where it is certain that someone will die in the following year, so the use of an ultimate age is a systems convenience to close-off the table and make calculations easier. The ultimate age implicitly defines an age assumed to be the oldest age to which it is possible to live. Given that Jeanne Calment lived to 116, the ultimate age of most tables is set somewhere between 115 and 125.

James Vaupel is an American demographer. He is a leading proponent of the idea of the plasticity of longevity and has argued strongly against the idea of a limit to human life expectancy.

An alternative name for a life settlement.

VitaCurves is a rating factor model updated annually by Club Vita in the UK, Canada and the US.

Club Vita has worked closely with the reinsurance industry to provide an indicative longevity swap price, called VitaHedge, within our regular reporting. Currently only available in the UK, but with a plan to roll out in Canada and the US.

VitaSegments are a way of segmenting the population into different groups that are experiencing longevity trends in different ways.

The Whittaker-Henderson model is a mathematical tool which is used to analyze and extrapolate trends in historical mortality.

A particular type of rating factor model used in the US which uses ZIP codes as a rating factor to reflect different longevity experience for people living in different areas.