DEFINITION of 'Aggregate Mortality Table'
Data on the death rate of everyone who has purchased life insurance, without categorization based on age or time of purchase. This calculation includes combined statistics of mortality tables.
In order to price insurance products and ensure the solvency of insurance companies through adequate reserves, actuaries must develop projections of future insured events (such as death, sickness, disability, etc.). To do this, actuaries develop mathematical models of the amount and timing of the events.
BREAKING DOWN 'Aggregate Mortality Table'
The tables are made by studying the incidence and severity of events in the recent past, developing expectations about how the drivers of these past events will change over time (for example, whether the increase in life expectancy that has been experienced over generations will continue) and developing an expectation for what the timing and amount of such events will be into the future.
From these expectations, tables of percentages indicating the number of such events that will occur in a population are created, usually based on the age or other relevant characteristics of the population. They may be referred to as mortality tables (if they provide rates of mortality, or death) or morbidity tables (if they provide rates of disability and recovery).