Persistence of Individual Mortality Risk Differentials Utilizing A Modified Online Predictive Market

Research Projects – Life Insurance


The Society of Actuaries' Futurism Section, Committee on Knowledge Extension Research and the Committee on Life Insurance Research are pleased to make available the following report investigating the persistence of individual mortality risk differentials. Preferred risk programs have become an essential part of individual life insurance programs in the term life and universal life markets. The best preferred risk classes have experienced significantly better mortality than higher risk classes in early policy durations. However, mortality experience that demonstrates how long mortality discounts at the best risk classes will persist does not exist due to the relative recent introduction of preferred risk classes. Conducted by Mark Justman of Social Technologies, this research used a modified version of an online "predictive market" process to examine both the degree and extent to which both preferred risks and risk premiums are expected to persist over 15–year and 30–year time horizons.

The Futurism Section Council, Committee on Knowledge Extension Research and the Committee on Life Insurance Research would like to thank the following individuals who served on the Project Oversight Group:

  • Mike Taht, Chairperson
  • Jay Biehl
  • Vera Dolan
  • Al Klein
  • Allen Pinkham
  • Chris Shanahan
  • Jan Schuh, SOA Research Administrator
  • Ronora Stryker, SOA Research Actuary

If you have any questions or comments regarding this report, please direct them to Ronora Stryker, SOA Research Actuary.