Jan. 20, 2022

On The Current Status and Possible Future Of Life Insurance

I believe that we are about to see some important changes to the Life and Disability Insurance industries as they struggle to find a way to mitigate the effects of a sudden increase in claims. To clarify, please permit this bit of insight into the life and disability insurance business over the past 24 months;

At the beginning of 2020, when SARS-Covid hit the news, insurers tightened their underwriting and reduced coverage in anticipation of the vast excess mortality predicted by models. However as the the year wore on, 'hard' data from claims did not show an increase in mortality or disability as had been predicted. Global life insurance claims for all of 2020 sat at a typical 3.5 Billion dollars and so by the spring of 2021 the insurers relaxed their policies, stating that SARS-Covid is not a dangerous disease.

That all changed when global life insurance claims reached 5.5 Billion dollars by the end of summer 2021 and industry expects that to top out at more than 7 Billion dollars for all of 2021; double the life payouts of 2020 and a tremendous blow to the bottom line of insurers

In the United States, insurance companies are reporting increases in deaths during the first nine months of 2021 of 40% to 350%. Aegon, a European company with operations in the United States report that their U.S. claims rose from 31 Million dollars for all of 2020 to 111 Million dollars for the first three quarters of 2021.

Metropolitan Life and Prudential Financial also show a rise in claims although they are not yet forthcoming with accurate numbers. South Africa’s Old Mutual has been forced to dig deeper into its operating budget to pay claims in 2021 and re-insurer Munich Re raised its 2021 estimate of COVID-19 life and health claims to 600 Million euros from 400 Million  (LINK)

As I have noted previously in 'Of Actuaries and Cremation' (LINK), Mr. Scott Davison, CEO of OneAmerica (Investments & Insurance) says the company is “...seeing, right now, the highest death rates we have seen in the history of this business – not just at OneAmerica...The data is consistent across every player in that business.”

He continued that the increase in deaths represents “huge, huge numbers,” and that’s it’s not elderly people who are dying, but “...primarily working-age people 18 to 64...What we saw just in third quarter, we’re seeing it continue into fourth quarter, is that death rates are up 40% over what they were pre-pandemic.

Just to give you an idea of how bad that is, a three-sigma or a one-in-200-year catastrophe would be 10% increase over pre-pandemic, so 40% is just unheard of.”

Davison also said the company is seeing an increase in disability claims; at first it was short-term disability claims, but now the increase is in long-term disability claims. For OneAmerica, the currently estimated impact of this increase in disability and death is $100 Million dollars which is a large portion of their smallest business arm

What is causing all of these deaths now that the vaccines have been taken by half (or more) of the global population? It cannot be the SARS-Covid virus or its less deadly mutations because while Covid ravaged the world unhindered all through 2020 the death rates remained low.

In Europe similar talks among insurers are taking place as a French insurer is currently refusing to pay out a large claim because the deceased was shown by autopsy to have died as a result of taking the mRNA injections.

This is not a surprising move on the part of the insurer as the industry typically regards death by the mRNA vaccine equal to suicide. Injecting experimental substances into your body and then claiming it was an accidental or natural death is denied in many life insurance policies (LINK)

You should check yours.

 Where is this leading? What will be the effects of both the increased mortality and the slow acknowledgement that vaccine deaths are making up a growing percentage of that increase?

Life insurance will become more expensive almost immediately while the underwriting and payouts will undergo much more drastic restrictions than they did in 2020. Yet if the trend in mortality continues to increase, how will the insurers cope in the short term? Many smaller firms will not be able to cope and they will either be bought up by a larger operation or fail into bankruptcy leaving customers stranded.

One way for the insurers to reduce their payouts is to demand an autopsy. Insurers currently expect at least 60% of the increase in claims is vaccine related so any proof of that would permit many claims to be denied.

Vaccine manufacturers will continue to claim that their products are safe and effective while insurers will be fighting to find proof that they are not.

Where does that leave the customer who has been forced to take the vaccine but now finds themselves disabled or dead because of it? They or their family have no recourse through the vaccine manufacturers, their insurance policy may not recognize their claim and the medical industry in general denies vaccines are related to increases in disability and mortality making government assistance difficult.

I would imagine these unprecedented (during peace time) increases in mortality are also reflected in the millions of 'missing workers' phenomenon now being seen across North America. Plus it is highly possible that the 30% to 40% decline in vehicle registrations and vehicle sales in Europe and the U.S. through 2021 are also a result either directly or indirectly through loss of production, of this increase in mortality (LINK)

Indeed even European countries are seeing this phenomenon of death unfold as this Bulgarian news report from January 2022 states:

“...deaths in Bulgaria were 88.2% of those for the same month in the base period before the pandemic. This is the highest death toll in the EU for the month, which turns out to be the deadliest in Europe last year. Despite the growth of deaths in Bulgaria in November, it failed to surpass the record of November 2020, when the death rate in Bulgaria was 94%. In October 2021, the over-mortality rate was 73.1%, and in September - 51.1%.

From the beginning of the pandemic until June 2020 is the only period in which fewer deaths were registered in Bulgaria than in 2016 – 2019.”  (LINK), (LINK)

 This is a truly heartbreaking scenario and it is on-going which means the reports of 'sudden death' and 'unexpected death' will only be increasing in the coming months. Insurance companies already know this and I thought that you should too.

Ted

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