The Cairns-Blake-Dowd Model to Forecast Indonesian Mortality Rates

Forecasting mortality rates has become important, especially for the pension fund and life insurance companies. If mortality rates for the next few years are known, then it will help the company to determine the amount of premiums. In this paper, the Cairns-Blake-Dowd (CBD) model will be used to forecast mortality rates of the Indonesian population. The least square method is used to estimate the parameters in the CBD model. Forecasted values of parameters in the CBD model can be obtained for the next three periods using Bivariate Random Walk with Drift. The final results show that forecasted Indonesian mortality rates for the next three periods have a downward trend.