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Factors affecting mortality (time selection and reverse TIS)

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asked Nov 19 in BUS 3024S - Contingencies by anonymous

Two questions:

1. What is the difference between normal temporary initial selection and temporary initial selection in reverse? I know TIS in reverse is when mortality starts off high and then decreases. Is normal TIS when mortality starts off low and then increases?

2. For time selection when there's a downward time trend, why do we not do anything in the case of lives assured. Surely a downward time trend suggests lower mortality which is not prudent in the case of an assurance and so we should make an adjustment (this is on page 9 of Dorrington's slides where he says we ignore the downward time trend).

1 Answer

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answered Nov 21 by Feroz (1,350 points)


1. Selection is a very general concept in that it represents having information/characteristics of a certain subclass of the full population.

In the context of life insurance, selection is generally taken in the context of differences in mortality rates. What I think you are referring to as "normal" selection, is when we have lower mortality rates for a section of the total population that is granted insurance because their state of health/future mortality risk is lower than the average for the population. This difference in mortality rates is only expected to last for a given period of time, i.e. the select period, after which the lives are considered to have the same mortality rates as the rest of the population.

2. I'm not too confident that I fully understand your question. Would it be possible to post that slide 9 on here so that it is clear what you are asking? 

commented Nov 21 by AA201 (100 points)

This is slide 9