Mortality Crisis: Insurers See Rise In Non-COVID Deaths

Regulators set future mortality rates today. — COVID-19 death rates will impact how insurers do business.

By Steven A. Morelli

The COVID-19 pandemic appears to have peaked, but the disease’s direct and indirect impact will take a while to assess, although it is clear that deaths have increased across the board.

LIMRA is parsing the data now for release in April, but early numbers show that COVID and non-COVID deaths have affected life insurance.

Over the first three quarters of 2020, overall death claims for life insurance increased 14%, but over the first three quarters of 2021, the increase was 20%, according to Marianne Purushotham, LIMRA corporate vice president and head of data sciences. About 60% of those deaths were related to COVID.

Non-COVID death claims spanned the spectrum of causes, Purushotham said. The only causes that did not increase were influenza and pneumonia, perhaps because people who are vulnerable to those morbidities either suffered from COVID or protected themselves from any airborne illness.

Three causes of death were elevated – those related to diabetes, hypertension and kidney disease, she said. They are afflictions that require regular medical attention and maintenance, which were more difficult to access during the height of the pandemic.

“Some of this increase across non-COVID is coming from delays in getting medical treatment or care for existing conditions,” said Purushotham, cautioning that is an educated guess at this point. “People are afraid to go to their doctors, and they worsen their health by doing that.”

A Decade To Normal?

The World Health Organization has said COVID deaths and infections likely peaked in February. But how long will it take for life to return to normal, or at least no longer critical, especially for the health care industry?

It could be five to 10 years according to some people Purushotham has heard in professional discussion groups, adding that some say it could be as soon as this year. COVID’s effect on health will be long term because of deferred medical attention and the still-unclear impact of long COVID.

Although the COVID-related mortality will decline, deaths of despair remain with us, as they have since the 2008 crash, Purushotham said.

Drug overdoses would fall in the despair category. The Centers for Disease Control estimated 100,306 deaths were due to overdose during the 12 months leading up to April 2021, a 28.5% increase from the prior year. Part of the reason was the rise of fentanyl, but overdoses increased in most drug categories, the CDC reported.

Deaths of despair tends to trend with the economy, Purushotham said, adding that the pandemic elevated that despair within a swamped health care system. A rising tide could lift that boat.

“As the pandemic peters out and we get into a good financial cycle, with a lot of people working and making decent salaries, we might get a drop, because that's what we would expect under those conditions,” Purushotham said.

Carrier Calls

Insurance carriers noted the effect of the elevated mortality during their conference calls on third and fourth quarter 2021 results.

Edward A. Spehar, Brighthouse Financial executive VP and CFO, said underwriting was below normal not only because of COVID directly, but because there could be "knock-on” effects, much like Purushotham described.

“Where you have people that aren't as quick to go to the hospital. They're not as quick to go to the emergency room,” Spehar said during the carrier’s fourth quarter call. “We know the cause of death reporting is imperfect.”

In The Hartford’s third quarter call, CEO Christopher J. Swift said the Delta variant had hit hard, especially for those under 65, which tracks with LIMRA’s findings.

“Approximately 40% of U.S.-reported COVID deaths in August and September were of individuals under age 65 compared to approximately 20% of COVID deaths in December of 2020 and January of 2021,” Swift said. “Since younger age cohorts tend to carry higher face amounts, the combination of increased deaths and higher amounts of insured values resulted in a significant increase in total dollar levels of mortality claims.”

Swift also noted the elevation of non-COVID mortality.

“In addition, we experienced higher levels of non-COVID excess mortality during the quarter, representing approximately 30% of reported excess mortality loss,” Swift said. “This is directionally consistent with the broader U.S. trends that saw elevated non-mortality in the third quarter.”

How Much Excess Mortality?

Actuaries are busy trying to understand the impact of the past few years on mortality, and much of that data is lagging. The last CDC figures show 2020, when deaths were increasing in many categories, such as a nearly 17% increase in deaths from accidents or unintentional injuries, as well as a nearly 15% increase in deaths from diabetes.

According to the CDC, in 2020:
• Life expectancy for the U.S. population in 2020 was 77 years, a decrease of 1.8 years from 2019.
• The age-adjusted death rate increased by 16.8% from 715.2 deaths per 100,000 population in 2019 to 835.4 in 2020.
• Death rates increased from 2019 to 2020 for each age group 15 years and over.
• Nine of the 10 leading causes of death in 2020 remained the same as in 2019, although five causes switched rank. Heart disease and cancer remained the top two leading causes, and COVID-19 became the third leading cause of death in 2020.

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].