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SHOULD ACTUARIAL MORTALITY ASSUMPTIONS BE MODIFIED?

A variety of NetActuary tasks require estimates of expected mortality. This includes life and remainder interest valuations for a lawyer; an SMSF adequacy report for an accountant; or a required retirement asset amount for a planner. Consequently, knowing how the Covid19 pandemic has affected mortality trends is important. The Actuaries Institute’s Covid19 Mortality Working Group has produced excellent analysis.

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When one looks at the causes of death, Australia continues to see significantly lower deaths from respiratory disease since lockdowns were introduced. The expected number of Influenza and Pneumonia deaths in 2020 was 15,700. The actual number was 12,300 – a 22% improvement. Other disease deaths were very close to expected. With diagnostic testing and treatment for cancer being reduced, there were concerns that there would be a spike in cancer deaths in 2021 and beyond. There is no evidence of this happening, however it is a factor to keep monitoring. The recent Omicron variant data is not in the recent analysis but appears to have reduced mortality compares to Delta. So at this stage I am not changing mortality assumptions but will report further in these blogs on developments.

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