Prolonging life by vitagions: modelling of mortality improvement shocks

Changes in life expectancy are commonly used to track shifts in mortality dynamics, yet they are hard to interpret, especially during so-called mortality shocks that arrive suddenly, are temporary, and run counter to the long-run trend. Purely extrapolative models cannot capture such changes. Therefore, we propose a forward-looking extension of the Lee–Carter framework, which integrates mortality improvements due to ‘vitagions’. Vitagions are individual sources of mortality improvement, and project how these might unfold in the future. To model mortality increases related to medical innovation, we consider extending the Lee-Carter model to capture heterogeneity in mortality (i.e. frailty-based model) and include a jump diffusion process estimated as a function of the relationship between medical progress and mortality trends to improve mortality projections.