Base table
\beɪs\ \ˈteɪbəl\
A set of age-specific mortality rates, typically expressed as the probability of death within a given time period (usually one year) for individuals at each age. It serves as a foundation for actuarial models used in life insurance, pensions, and other longevity-related financial products.
Three common approaches to creating base tables are:
- Traditional (standard) tables: Published tables based on large-scale population or insured lives data. They reflect average mortality experience and are often used as benchmarks.
- Rating factor tables: Tables that adjust base mortality rates using rating factors such as affluence, address based socio-economic indicators and occupation. These tables allow for more granular pricing and reserving by accounting for known mortality differentials.
- Bespoke Mortality Tables: Custom-built tables developed from a specific dataset, such as a pension fund’s own experience or an insurer’s portfolio.
Actuaries often tailor commercially available base tables to allow for residual mortality characteristics for a given population using experience analysis and credibility adjustments.
Related content
