Mortality Forecasting Using Negative Binomial Model

Abstract

People living in America today are living longer compared to yester years; this is due toreduced mortality rates and increase in life expectancy. Over the years mortality rates have continuously been declining. However, other courses of death like suicide rate have been soaring high for the last 25 years which is a worrying trend for both the state and the insurance providers. According to study report conducted between 2011 and 2012, life expectancy improved by 0.1 years from 78.7 to 78.8 years. This was attributed to improvement of services in the health sector in the country. This constant change in mortality rates is proving to be a challenge to the insurance industry and pension providers in designing the right products for their consumers. In this paper Negative Binomial Regression model is used to forecast male mortality of the United States of America (1980-220). The results of this analysis demonstrate that Negative Binomial with simple polynomial functions give better mortality forecast over the given period.