5 INTRODUCTION In this publication, an estimate is presented of the development of mortality probabilities and life expectancy in the Netherlands. This estimate is based on the most recent mortality data for the Netherlands and European countries with a comparable level of prosperity. 5.1 Biennial update of the estimate of mortality probabilities Every two years the Association publishes an update of the projection model with which projections can be made of the development of the mortality probabilities of the population of the Netherlands. This model is relevant to pension funds and life insurance companies because it can be used to estimate the level of technical provisions. Publicly available data from the Human Mortality Database (HMD), supplemented, where necessary, with data from Eurostat and data from Statistics Netherlands, form the basis for the new Projection Table AG2016. Data is available for the selected European countries up to and including 2014. In the case of the Netherlands, mortality observations are also available for 2015. 5.2 Developments in the method A stochastic model was introduced with the previous projections life table, Projection Table AG2014. This makes it possible to give an impression of the uncertainty in the development of life expectancy. The projection is also not limited to an horizon of 51 years, so that life expectancies can be calculated for cohorts. The Projection Table AG2016 also gives an estimate of the correlation between the development in the mortality of men and women. 5.3 Definition of life expectancy There are two definitions of life expectancy. A classic definition of life expectancy is so-called ‘period life expectancy’. This period life expectancy is based on the mortality probabilities in a particular period, for instance within a calendar year, and assumes that mortality probabilities in the future will remain the same. Period life expectancy therefore does not take into account future expected developments in mortality probabilities. This definition is often used to compare developments over time, but cannot be used to estimate how long people are still expected to live. The second definition, cohort life expectancy, on the other hand, does take into account future developments in mortality. Cohort life expectancy is based on the expected developments in mortality probabilities in future calendar years. Projection Table AG2016 Introduction 10
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