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📋 '''Experience mortality table''' is a mortality table constructed from the actual death-claim data of a specific [[Definition:Insurance carrier | insurer]], [[Definition:Reinsurer | reinsurer]], or defined population, rather than from broadly published standard tables. In [[Definition:Life insurance | life insurance]] and [[Definition:Annuity | annuity]] markets, standard tables — such as the Commissioners Standard Ordinary (CSO) tables published by the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] in the United States or the CMI tables issued by the Continuous Mortality Investigation in the United Kingdom — provide a baseline, but they reflect industry-wide averages that may not capture the mortality profile of a particular insurer's policyholders. An experience mortality table bridges that gap by reflecting the insurer's own [[Definition:Underwriting | underwriting]] standards, product mix, and policyholder demographics.

⚙️ Building an experience table requires collecting years of [[Definition:Claims | claims]] and exposure data, segmented by age, gender, smoking status, policy duration, and other rating variables, then applying statistical techniques to graduate the raw rates into a smooth, usable curve. Actuaries typically compare their experience table against a standard reference table to derive "A/E" (actual-to-expected) ratios, which reveal whether the company's book of business is lighter or heavier in mortality than the benchmark population. In markets governed by [[Definition:Solvency II | Solvency II]], insurers must use best-estimate assumptions for technical provisions, which often means company-specific experience tables take precedence over generic ones when credible data exists. Under [[Definition:IFRS 17 | IFRS 17]], the requirement to use current, unbiased estimates of future cash flows likewise pushes insurers toward experience-based assumptions. In jurisdictions like Japan and China, regulators prescribe minimum reserving tables but still expect carriers to monitor actual experience and adjust pricing and product design accordingly.

🎯 The practical importance of experience mortality tables extends well beyond reserving. They directly inform [[Definition:Premium | premium]] pricing — a company whose policyholders consistently exhibit lower mortality than the standard table can price more competitively or retain richer margins. They also shape [[Definition:Reinsurance | reinsurance]] negotiations, because a reinsurer offered a block of business will want to see the ceding company's experience data before quoting terms. For companies operating in the [[Definition:Longevity risk | longevity risk]] space, such as pension buy-out specialists, experience tables that accurately capture how long annuitants actually live are mission-critical, since even small deviations compound into enormous reserve differences over decades. Poor mortality assumptions, whether too optimistic or too conservative, distort capital allocation and can mislead both management and regulators about a carrier's true financial position.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Mortality table]]
* [[Definition:Actuarial assumption]]
* [[Definition:Longevity risk]]
* [[Definition:Life insurance]]
* [[Definition:Reserving]]
* [[Definition:Actuarial valuation]]
{{Div col end}}

Definition:Experience mortality table - Revision history

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