Empirical Analysis of Mortality Improvement Trends in Nigeria and Their Implications for Actuarial Practice

This study provides a rigorous empirical analysis of mortality improvement trends in Nigeria over the period 2000 to 2023 and derives their implications for actuarial assumptions in life insurance pricing, pension valuation, and social security financing. Mortality improvement, the progressive decline in age-specific death rates over time, is a foundational actuarial input that materially affects the long-run financial adequacy of life-contingent products. In Nigeria, mortality improvement data are sparse and inconsistently compiled, leading to heavy reliance on static mortality assumptions in actuarial practice. This study constructs national and regional period life tables from five waves of the National Demographic and Health Survey, supplemented by vital registration data from the National Population Commission. Lee-Carter and Cairns-Blake-Dowd mortality projection models are fitted to the constructed mortality time series and compared on out-of-sample forecasting accuracy. Geopolitical zone-level mortality improvement rates are estimated and compared. Findings reveal statistically significant mortality improvement trends at the national level averaging 0.7 percent per year across all age groups, with faster improvement observed in urban-zone-associated mortality causes. Substantial geographic heterogeneity exists, with the South West showing improvement rates approximately twice those of the North East. Lee-Carter outperforms CBD in the Nigerian context due to data sparsity constraints. The study concludes that Nigerian actuarial practice systematically underestimates future longevity improvements. It recommends that NAICOM mandate mortality improvement projections in all long-duration life insurance pricing and pension valuation work.

Keywords: mortality improvement, Lee-Carter model, life tables, actuarial assumptions, Nigeria.