Trendspotting: Life Insurers See Jump in Non-Covid-19 Deaths

NewsWire: 3/14/22

• Life insurers are seeing a rise in non-Covid-19 deaths. In Q3 2021, major insurers saw the number of death-benefit claims not related to Covid-19 increase by 19% compared to pre-pandemic levels. (The Wall Street Journal)
  
• NH: Not surprisingly, life insurers paid out a large number of claims last year related to Covid-19. But the number of claims for other causes of death jumped, too.
• Data from 20 U.S. insurers’ employer-sponsored life insurance programs analyzed by the Society of Actuaries Research Institute show that, in Q3 2021, the number of non-Covid-19-related claims increased +19% compared to the same quarters before the pandemic (2017-19). In Q2 and Q1 2021, the number of claims were up only slightly (+0.2% and +0.3%, respectively). Earlier, from Q2 to Q4 2020, non-Covid claims ran between +3.0% and +6.4% higher than baseline.
  

• Among the insurers noting higher non-Covid-19 deaths are Globe Life (GL), Hartford Financial Services Group (HIG), and Primerica (PRI). One privately held group life insurer, OneAmerica, noted earlier this year that death rates among working-age adults were up +40% in Q3 and Q4 2021 compared to pre-pandemic baselines, with about one-third of the deaths attributed to causes unrelated to Covid-19. Thus, non-Covid-19 mortality rose about +13% over baseline.
• According to the SAR analysis, these percentages wobble erratically over time. But given the most recent figures, it's plausible to infer that insurers have seen a roughly +10% to +15% increase in non-Covid-19-related claims overall in the working-age population.
• How does this compare with what the CDC reports is happening to mortality rates nationally? From Q3 2019 to Q2 2021, according to the CDC, crude death rates rose between +22% and +34% among those ages 25 to 64, with the sharpest increase in the 35-44 bracket. Assuming that two-thirds of this increase was due to Covid-19, then the rest (around +10%) would be due to other causes. This aligns with what insurers are seeing.
• To be sure, the correlation between the CDC data and insurers' data is only approximate. We can use CDC data to track the mortality rate for all working-age Americans, while the insurers are looking at mortality rates more specifically among employed, working-age Americans with life insurance policies. Any important differences here? Perhaps. Most notably, the insurers' group is less likely to have to be affected by the recent rise in homicides and drug overdoses. But because these two causes represent no more than 8% of the overall increase in deaths, any mortality differential between the two groups on this account won't significantly change the overall result.
• Let's step back and consider the larger question that these figures raise. Why have deaths not related to Covid-19 gone up?
• First of all, we can think of the pandemic as having a cascading effect on health. It delayed routine care and screenings, made people put off seeking treatment, and sent stress levels and loneliness soaring. Average blood pressure readings among American adults, for instance, rose significantly in the second half of 2020 YoY.
• We also know that Covid-19 does not only kill people whom it acutely infects. Covid-19 also significantly increases people's risk of dying of other causes over the longer term. The definitive study here was conducted on 73K Covid-19 patients in the Veterans Health Administration. It showed that the mortality rate among all Covid-19 positive patients during the six months after their recovery from infection (that is, after 30 days) was +59% higher than in a demographically identical group that was never infected.
• Considering that at least 79 million Americans, or a quarter of the population, have had Covid-19, the +59% mortality rise translates to a +15% higher risk of death across the entire U.S. population. This number, +15%, is pretty much in line with what insurers are seeing.
• The CDC's data on "excess deaths" indicate that the mortality rates of diabetes and circulatory diseases, including ischemic heart disease, hypertensive diseases, and heart failure were consistently higher throughout 2021 than before the pandemic began. While these conditions aren't necessarily related to Covid-19, they do correspond closely with some of the most common and debilitating symptoms of Long Covid (see "Long Covid Casts a Long Shadow"). 

• IMO, we have only begun to see the wider toll on people’s health that the virus is taking, whether it’s in the form of increased vulnerability to other illnesses, deferred medical care, or Long Covid. The fact that the largest increase in insurance claims has occurred recently as opposed to earlier in the pandemic suggests that many of the problems we are seeing now took time to develop--and that there's more to come.
• Thus, we can expect much of the observed increase in non-Covid-19 deaths (and death claims) to persist in 2022 and perhaps longer, even after acute deaths from Covid-19 have already declined. These excess deaths, moreover, will continue to be much more evenly spread across age brackets.