The current casualty rate is absolutely out-grown by the birth rate, as all lords will have multiple children but rarely killed on the battleground.
To have the option of enabling KIA of all NPC is a great approach to balancing the population, and it offers more fun by adding weight to NPCs' lives. Therefore, I wonder if it is possible to add a "hardcore mode" that makes player, NPC companion, and NPC lords almost as fragile as any trivial recruited militia. (Not like now, NPCs will be chopped down way more times than a valentia militia)
Since all characters including the soldiers and NPC lords and players are using the same armor system, we can determine death using the damage overflows - for example, all characters will be KIA in battle if the damage received exceeds 150% of the maximum hitpoints. Because of the better armor quality, NPC lords would still survive more than a peasant militia, but not by much, which is more realistic. With the same mechanic, the player has to be more cautious early game as the inferior armor could cause more casualty, and the player can be more adventurous in the later game as being protected better.