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Experience analysis

\ɪkˈspɪriəns\ \əˈnæləsəs\

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).

Under a “lives based” analysis, the number of deaths over the assessment period will be compared to the number of deaths predicted by the standard table or rating factor model. The actual number of deaths divided by the expected number of deaths (or A/E), expressed as a percentage, indicates whether the mortality rate has been heavier (A/E is > 100%) or lighter (<100%) than predicted.

An “amounts based” analysis is the same calculation but comparing actual and expected pensions ceasing due to death.

The results of an experience analysis can be used to set an assumption for future mortality rates for a group of lives – often by applying credibility theory.

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