Mortality Experience of FSAs, class of 1975
Mortality Experience of FSAs, class of 1975
Do actuaries have better mortality rates than the general population? Read on to find out.
By Philip Lehpamer
Two hundred twenty individuals became Fellows of the Society of Actuaries in 1975, and their mortality experience for 31 calendar years, 1975 through 2005, has been investigated as part of an ongoing study. In January 2007, the Actuarial Practice Forum published on–line my paper "Mortality Experience of Members of the Society of Actuaries" which investigated the mortality experience of 3,037 members of the Society, including all Fellows who attained fellowship through 1974. This note takes the investigation through one more class of Fellows.
Two of the findings of the January 2007 paper were: (1) The mortality ratio of pre–1975 male Fellows was 49.7 percent where the base of expected deaths was male population mortality developed by the Social Security Administration, and (2) Male FSA mortality was improving for later FSA classes. That is, the mortality ratio for pre–1949 male Fellows was 59.6 percent while the mortality ratio for 1949–1974 male FSAs was 40.7 percent. The mortality ratio for 1949–1968 male Fellows was 42.1 percent while the mortality ratio for 1969–1974 male Fellows was 34.8 percent.
This pattern of improving male mortality is consistent for the 1975 class. Of the 220 1975 FSAs, 14 were females and 206 were males. The ages of the new male Fellows ranged from 24 through 42 with average age of 29.4, and the ages of the women Fellows from 26 through 46 with average age of 29.7. As of 12/31/2005, there was one female FSA death and three withdrawals from membership, leaving 10 female FSAs; and there were 10 male FSA deaths and 28 withdrawals, leaving 168 male FSAs from this class.
The male mortality experience is as follows, Table 1.
Female mortality experience where the base of expected deaths is female population mortality experience developed by the Social Security Administration is (albeit based on limited numbers), Table 2.
Another finding of the January 2007 paper for pre–1975 male Fellows was that not only is the mortality of actuaries low at the younger ages; but this low mortality continues at the older ages above age 60 and even above age 90 where FSA mortality is about 13 percent lower than population mortality. This may be seen in the following table.
Individuals in professions have historically experienced lower mortality than that observed in the general population and this generally has been attributed to high educational attainment. Lower mortality for actuaries at advanced ages has also been documented in prior studies. For example, when John Cook and Ernest J. Moorhead published their study in TSA, Volume XLII, 1990, Edward A. Lew commented (p. 51) "the very low mortality at ages 60 and older bespeaks of such characteristics as moderation, carefulness and discipline associated with our profession."
Experience by age for 1975 Male FSAs is shown in the table below. We will have to wait another 30 years to obtain mortality experience at the advanced ages. (Table 4)
The January 2007 paper compared FSA mortality to recent pension plan experience and individual life experience reported on the SOA Web site and found it to be favorable, but direct comparisons of FSA mortality to other professional groups is difficult to accomplish because insurance carriers that have actual experience on comparable professional groups consider such information to be proprietary and are not willing to make it public. Without a direct comparison to other professional groups, the question as to precisely how good FSA mortality experience has been to relative to other professions remains open.
Two additional findings for the pre–1949 actuaries could not be investigated for the class of 1975 because I do not have the necessary data; however, I mention these results because they are interesting and the first somewhat surprising:
- The mortality experience of pre–1949 male Associates who subsequently never attained Fellowship is significantly worse than the experience of pre–1949 male Fellows (70.4 percent versus 59.6 percent). Moreover, a direct comparison of two groups of cohorts of pre–1949 male Associates, one comprised of individuals who subsequently attained Fellowship and the other comprised of those who didn't, shows significantly better mortality for those who became Fellows (44.8 percent versus 70.4 percent).
- The pre–1949 male FSA experience was separated by geographical location at the time the person's actuarial career began and showed there was no significant difference between those who started in the United States versus those who began in Canada (59.2 percent versus 60.5 percent).
Details on the methodology and other information regarding these studies may be found in the January 2007 paper located on the Society's Web site.
Philip Lehpamer, FSA, is retired.