Actuarial and Demographic Forecasting Methods

The purpose of this chapter is to present common methods of forecasting mortality used by actuaries in the American insurance industry. In a loose sense, the term forecasting refers to two different tasks, both of interest to the actuary. Of primary interest to actuaries are forecasts of the future mortality experience of groups. Individuals of a group are assumed to be subject to mortality according to some known set of probabilities. A second type of forecasting involves assessment of future patterns of the mortality process.