I know of far too many actuaries who think that the “average” SA85/90 table is an appropriate base for their insured lives mortality assumption.
It’s also a good example of “actuarial sloppiness”.
To be specific, it is equally inappropriate if your current experience is a reasonable fit for the combined SA85/90 table.
SA85/90 was graduated based on South African insured lives data from 1985 to 1990. This period is important because it’s generally felt to be the last period in South Africa where HIV/AIDS would not have had a significant impact on mortality. (Estimates differ, but 1985 is often taken as the starting point for the HIV epidemic in South Africa and even though there might have been some deaths within the first five years, it is inconceivable to have affected a significant portion of the population.)
SA85/90 came in two version, “light” and “heavy”. Somewhat disappointingly, no distinction was made between males and females. Light mortality reflected the typical, historical, insured life characteristics which was pretty much white males. If I recall correctly, “Coloured” and “Indian” males were also combined into the light table. “Heavy” mortality reflected the growing black policyholder base in South Africa.
For all the awkwardness of this racial classification, the light and heavy tables reflect the dramatically different mortality in South Africa based on wealth, education, nutrition and access to healthcare. Combining the results into a single table wasn’t reliable since there were significant differences in mortality AND expected changes in the proportions of the heavy and light populations in the insured populations into the future.
A combined table was still created at the time. I suspect Rob Dorrington may have some regrets at having created this in the first place or at least in not having included a clearer health warning directly in the table name. The combined table reflects the weighted experience of light and heavy based on the relative sizes of the light and heavy sub-populations during the 1985 to 1990 period. I think a safer name would have been “SA85/90 arbitrary point in time combined table not to be used in practice”.
There is no particular reason to believe that the sub-population that you are modelling reflects these same weights. Even for the South African population as a whole these weights are no longer representative. The groups, at least in the superficial sense we view any particular citizen as coming from distinctly one group, will fairly obviously have experienced different mortality but will also have experience different fertility and immigration rates.
Our actuarial pursuit of separating groups of people into smaller, homogenous groups should also indicate that in most cases the sub-population you are modelling will more closely reflect one or the other of these groups rather than both of them.
But even if, just for the sake of argument, your sub-population of interest does reflect the same mix at each and every age as baked into the combined SA85/90 table, then it would still be entirely inappropriate to use the table for all but the crudest of tasks. After all, there a reason for our penchant for homogenous groups. If you model your sub-population for any length of time, the mix will surely change as those exposed to higher mortality die at a faster rate than those with low mortality.
The first order impact would be that you would be modelling higher mortality over time than truly expected. Due to the relative mortality between the two populations differing by age, the actual outcome will be somewhat more complex than that and more difficult to estimate in advance. This is particularly important with insurance products where the timing of death is critically important to profitability.
So, just because you can get a reasonable fit to your experience of an age- or percentage-adjusted SA85/90 combined table does not mean you have an appropriate basis for modelling future mortality. It may not vastly different from a more robust approach, but it’s just sloppy.