5 INTRODUCTION PROJECTIONS LIFE TABLE AG2018 Through the publication of Projections Life Table AG2018, AG presents an assessment of the expected development of survival rates and life expectancy in The Netherlands. This assessment is based on the most recent mortality data from The Netherlands and from European countries of similar prosperity. The result is a forecast of mortality probabilities by age for each future year for men and women. This introduction describes why and for whom the forecast is made, how the model works and what activities were performed since the release of Projections Life Table AG2016. 5.1 Why does AG develop a projection model for mortality probabilities? Every two years AG publishes a projection model to forecast the development of mortality rates in the Dutch population. This model is relevant to pension funds and life insurance companies. A projection model is required for the determination of the provisions held by pension funds and insurers. Pension benefits, for example, are paid as long as a member or insured person lives and therefore it is important to know how long this person is expected to survive. AG combines expertise from science and the pensions and insurance industry to develop this mortality forecast. The AG model is fully transparent: based on the model documentation and the data used, the model can be copied and its results reproduced. AG has developed this model for the whole industry and it therefore contributes to market uniformity. 5.2 How does the model work? Since the publication of Projections Life Table AG2014, the projections have been based on a stochastic model. This makes it possible to give an impression of the uncertainty in the development of life expectancy. Firstly, the model projects forward European mortality in countries with a prosperity level similar to Dutch prosperity. This is done by continuing European trends from the past into the future. Then a projection is made of the difference between this European mortality and mortality in The Netherlands. By including European trends a large amount of data becomes available. This leads to a stable forecast of future life expectancy. In the approach taken, the current view is, that life expectancy will continue to rise. The evolution of life expectancy is the balance of all (positive and negative) circumstances that impact life expectancy. We take into consideration that at any time new developments may occur that will bring about a further increase in life expectancy. This may relate to, for instance, medical or technological developments or developments related to lifestyle and environment. Mortality developments observed in the past also had multiple causes, such as changes in smoking behaviour, improvements in the treatment and prevention of cardiovascular diseases and an increased regard for a healthy lifestyle. Projection Table AG2018 Introduction Projections Life Table AG2018 10

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