Teo wins the price for the best master’s thesis about mortality forecasts

Teo Raspudic

"I’m very proud of the project I have done and was very happy when my effort was awarded," says former MDU-student Teo Raspudic, the recipient of the Thule foundation’s price for the best master’s thesis. His paper is about mortality forecasts, which are an important tool for governments in constructing optimal financial strategies, e.g. planning future budget distribution related to pensions and health care support.

The Thule Foundation was initiated by the Swedish insurance company Skandia, which focuses on long-term investments and savings that provide sustainable growth. Teo’s supervisor at MDU, Milica Rancic, shared the announcement from Skandia and Thule Foundation on his study programme’s Canvas-page, which is how Teo found out about this. Teo studied the Bachelor’s programme in Analytical Finance as well as its continuation - the Master’s Programme in Financial Engineering.

"The specialisation in Financial Engineering provided precious knowledge that turned out to be very important for my current and future work and career in general, says Teo. The topic of his master’s thesis is The efficiency of Hyndman-Ullah methods in case of populations with abnormal short-term increases of mortality rates due to wars and pandemics External link.."

"I used what I learned during the Actuarial mathematics External link. course to a great extent to write my master’s thesis. My supervisor had the initial idea for the topic of the master’s thesis project, being inspired by the Covid-19 pandemics that was still highly influencing our lives, says Teo."

The thesis starts with the selection of two countries for which reliable mortality data was available for the periods of the World War (WW) I and II including the period of the Spanish flu. The idea was to assess how efficient are the so-called Hyndman-Ullah (HU) and weighted HU models in such specific circumstances.

Another factor was the intensity of the extreme mortality jumps in different countries. Sweden represents a country that remained neutral during both WWs. Oppositely, France is a great representative of a country that actively participated in the biggest conflicts. So, based on the existing records of mortalities in those two countries, Teo was able to compare them with the models’ predictions. This investigation is a so-called in-sample forecasting, allowing us to assess the accuracy and robustness of the used models.

The second part of the research is a so-called out-of-sample forecasting, which means that there is no existing data nor benchmark to compare our forecasted results to. The reason for this is the fact that Teo made the forecast for the future (after the Covid-19 pandemics up to the year 2050) and only time will be able to tell how accurate those predictions were. Here, he expanded the forecasts to four countries - Sweden, Denmark, Spain, and Japan.

The structure of his thesis has changed during the process of writing, but the general idea remained the same: Taking the two models for mortality forecasting and investigating how accurate and robust they are when analysing populations facing periods of extreme jumps in mortalities caused by, for example, wars and pandemics.

"There were many trials and errors until the most insightful and optimal results were found," says Teo.

Teo Raspudic is currently employed with the startup company Velory, which is located in Stockholm, Sweden. He works in a team which belongs to the department of operations and analytics, where he applies different types of skills. Now, Teo does a lot of investigation and research, as well as building and analyzing different dashboards, results, and statistics.

"At the university, I learned how to provide information in a structured way, emphasizing the most notable factors and state conclusions. I’m still in the very beginning of my carrier and there’s a lot for me to find out, learn and improve," he says.

He adds that he enjoyed politeness and respect in the relationship between the students and teachers and never experienced any problems in that manner. Not only that, MDU was the place where Teo obtained the first job in his life - working in the student café.

He also emphasizes that he became a part of the international environment. My five years of studies gave me an opportunity to meet different kinds of people, learn more about them, their countries of origin, traditions, culture and more.

"Being a student at MDU has made it possible to meet lots of interesting people from different cultures. I established friendships with people I stay connected to this day," he says.