The Continuous Mortality Investigation's (CMI) latest model shows that the UK's 65-year-olds have experienced a modest fall in life expectancy following the outbreak of COVID-19.
The CMI_2020 model – which is used by pension schemes and insurers to make assumptions about future mortality rates – produces cohort life expectancies at age 65 that are about four weeks lower for males, and one week lower for females, than the model released 12 months ago.
Average mortality rates were 12% higher in England and Wales last year than in 2019, which was the largest year-on-year increase since 1929, and the highest rate recorded since 2008.
Although this will affect actuarial calculations, the CMI has disregarded 2020 mortality data for its latest model, as this is well outside the range of year-on-year changes seen over the past four decades, and is likely to be an outlier.
Cobus Daneel, chair of the CMI's Mortality Projections Committee, said that placing no weight on last year's data received strong support from the model's users, who view the move as a “sensible and pragmatic approach”.
“We recognise that to see the full picture we need to consider deaths from all causes – not just those directly liked to COVID-19 – while allowing for a growing and ageing population,” he continued.
“For this reason, we are publishing weekly updates to our mortality monitor during the pandemic, which focus on excess deaths relative to age-standardised mortality rates in 2019.”
“Users can modify the model to take account of data for 2020, fully or partially, if they choose.”
This comes after Aon cautioned against overstating the negative impact of COVID-19 on the longevity assumptions of UK pension schemes.
A recent poll of insurers and reinsurers by the firm found that 40% thought the longevity outlook from mid-2021 onwards was broadly the same as before the pandemic, with 30% thinking it was slightly worse, and 30% thinking it was better.
Tim Gordon, head of demographic horizons in Aon’s Risk Settlement Group, said that the findings are consistent with opinions across the industry, and said that some factors might have actually been positive for longevity during the pandemic.
“These include bearing down on the thousands of winter flu deaths we saw pre-pandemic – although flu could bounce back with a vengeance in the short term – the improvement of UK systems to deal with future pandemics, and accelerated health benefits from wider application of mRNA vaccines.
He continued: “Harsh as it may sound, we may also have a surviving population that is potentially more robust in the short term.
“On top of this, high vaccine efficacy and the UK’s speedy vaccine rollout and investment in future vaccine production suggest that the danger of seeing some of the more extreme COVID-19 scenarios has receded."
Image credit: iStock
Author: Chris Seekings
