Life - Articles - CMI Model shows small drop in cohort life expectancy

 The CMI Model is used by UK pension schemes and insurance companies which need to make assumptions about future mortality rates. While mortality experience in 2020 and 2021 will affect actuarial calculations, mortality in both of these years has been exceptional and is unlikely to be indicative of future mortality. For this reason, the CMI places no weight on the data for 2020 and 2021 in the core version of the model.

 CMI_2021 produces cohort life expectancies at age 65 that are about two weeks lower, for both males and females, than in the previous version of the CMI model, CMI_2020.

 Cobus Daneel, Chair, CMI Mortality Projections Committee, said: “While mortality can be volatile from year to year, we tend to see falls over time so it is unusual to see such a sustained increase in mortality. We have to go back to 1940-41 to find a period as unusual as 2020-2021 relative to the preceding five-year average.

 “The impact of the coronavirus pandemic has meant that we have placed no weight on 2021 mortality experience. We did the same with the 2020 core model after a consultation process and users from the pensions and insurance industry expressed strong support for this temporary change. We encourage users to consider adjusting the model’s parameters to reflect their own portfolios and their views of the impact of the pandemic.”

 For more information on the CMI Mortality Projections Model, CMI_2021, please see the FAQs.

 From April 2020 to date, the CMI Mortality Projections Committee has produced a regular mortality monitor with a focus on ‘excess deaths’ during the pandemic.