The Longevity Prospects of Australian Seniors: An Evaluation of Forecast Method and Outcome

Abstract

Abstract Continuing rapid changes in the level and pattern of mortality require that forecasts are available that are timely, relevant and reliable. This paper evaluates a previous forecast of the mortality and longevity of Australian seniors, both in terms of the validity of the chosen method – the Booth–Maindonald–Smith (BMS) variant of Lee–Carter – and the accuracy and reliability of the forecast itself. The validity of the method is assessed by a comprehensive review and evaluation of available methods, confirming BMS as the method of choice. The accuracy and reliability of the forecast is assessed by comparing it with actual experience and with a new forecast of period and cohort survival probabilities and life expectancies. The evaluation and the current forecast itself will inform the actuarial profession and wider industry in the areas of mortality and longevity risk as well as public debate and policy in population health and ageing.