Population sub groups distorting life tables say actuaries

Actuaries need to make predictive models when developing financial products in order to forecast mortality rates, inflation and investment returns that will be available in future. A longevity conference held at Warwick University, heard actuaries Greg Becker and Garth Lane, both of RGA, talk on the role of heterogeneity (the quality of being diverse), and how unmodelled aspects could invalidate a model's predictions. They illustrated their message by considering a scenario in which two models could be used which both produced similar results for many years before diverging due to the...