Rise in non-Covid-19 deaths hit life insurers

As expected, US life insurers made a large number of COVID-19 death-benefit payments last year. More surprisingly, many also saw a surge in other claims of death.

Industry executives and actuaries believe that many of these other deaths are linked to delays in medical care as a result of the lockdown in 2020, and then, later, trouble with people seeking treatment and line up appointments. is afraid of.

Some insurers continue to maintain high levels of these deaths for some time, even though there has been a decline in Covid-19 deaths this year.

In earnings calls for the past two quarters, Globe Life Inc., Hartford Financial Services Group Inc., Primerica Inc. and Reinsurance Group of America Inc. Non-Covid-19 deaths were among the insurers noting higher non-Covid-19 deaths compared to the pre-pandemic baseline.

Frank Svoboda, head of Globe Life Finance, told analysts and investors earlier this month: “The losses we are seeing continue to rise above 2019 levels, at least in part, we believe, due to the pandemic and or So for the existence of delayed or unavailable healthcare.”

He added that among the non-coronavirus-specific claims are deaths from heart and circulatory issues and neurological disorders. “We anticipate that they will start to be less impressive during 2022, but we anticipate that we will still see some higher levels at least throughout the year,” he said.

Primerica officials similarly cautioned in their fourth-quarter call about increasing the number of non-Covid-19 deaths in 2022. “Some of this will be the result of delayed medical care or an increased incidence of social-related issues, such as the increased prevalence of substance abuse,” Chief Financial Officer Alison Rand said in an email interview.

From the early stages of the pandemic, many medical professionals have raised concerns about Americans’ untreated health problems, as COVID-19 strained the nation’s health system.

The trade group American Council of Life Insurance said the 2020 pandemic caused the largest annual increase in death benefits paid by US carriers since the 1918 influenza pandemic, totaling billions of dollars. Although the impact on the industry’s bottom line has been less than initially feared, many of the victims have been older people, who usually have smaller policies, if any coverage.

Still, Covid-19 and other additional deaths have cut into the quarterly earnings of many carriers, particularly the Delta version of deaths linked with increased employer-sponsored death benefits for people in their working years. “The earnings impact has been material and there still appears to be some Covid-19 discount, but investors are starting to see the cost of mortality claims,” ​​said Andrew Kligerman, stock analyst at Credit Suisse Securities.

Industry-wide, death-benefit claims usually vary only slightly from year to year, so recent growth is out of the norm.

Some life insurers said non-Covid-19 additional deaths rose in the third quarter of last year after a negligible or marginal count. Those numbers line up with the results of an ongoing COVID-19 survey by the Society of Actuaries Research Institute of 20 of the country’s leading sellers of group-life insurance to employers.

In the third quarter, the survey shows, the number of claims made was 37.7% higher than a pre-pandemic baseline, with about 50-50 split between claims directly linked to COVID-19 and those made by R. Not according to Dell. Hall, managing director of Research at Society, a professional organization. The group is still assessing the fourth quarter data.

Non-Covid-19 additional claims for the third quarter were 19% compared to 18.7% for Covid-19 claims, Mr Hall said. Non-coronavirus-specific additional claims were not up from 6.4% in previous quarters.

Discussing third-quarter results with analysts, Hartford Financial Chief Executive Christopher Swift said the company “experienced high levels of non-Covid excess mortality during the quarter,” including deaths from cancer of the heart, stroke and reasons are included.

He added that the company’s experience with such claims “has been very bouncy over the last six quarters, so I don’t see a trend,” beyond those that “to indicate a second-order impact with Covid.” Not taking care of other people.” Own.” The insurer is one of the largest group-benefit providers in the country.

At non-publicly traded OneAmerica Financial Partners, another group-life-insurance vendor, claims for working-age adults were about 140% of the pre-pandemic baseline during the third quarter, said CEO Jay Scott Davison. .

He said about two-thirds of these additional deaths are Covid-19-specific. In the remainder, in addition to deaths from deferred medical care, Mr Davison’s team believes some may stem from earlier COVID-19 infections. He cited scientific research indicating that the virus could pave the way for future medical complications, so survivors “may later die from the toll that Covid has taken on their bodies.”

The direct or indirect impact of COVID-19 on the cost of life insurance is unclear. Some insurers say they are marginally re-evaluating group-life contracts on the assumption that the virus will be there until at least 2022. Those contracts are typically replaced every two years. In the meantime, insurers are still trying to determine what effects they may or may not have on long-term mortality.