Excess mortality among insured working-age adults (2021)
In 2021, US life and group insurers saw excess mortality on the order of 40% among insured adults aged 18 to 64, four times the size of a one-in-200-year shock.
Group life portfolios cover employees, a population considered healthier than average, which is what justifies their low rates. The Covid-19 pandemic first hit the elderly in 2020, then, with the Delta variant in 2021, working ages, precisely those portfolios. Insurers then saw ratios of actual to expected deaths far beyond the prudential shock scenarios, which are calibrated on a rise of roughly 10% to 15% for a one-in-200-year event. The episode showed three things: indirect causes (delayed care, overdoses) push excess mortality above the deaths attributed to the virus; a shock can last several years; and annuity books, which gain when mortality rises, offset losses on death portfolios only in part.
On December 30, 2021, at a news conference held by the Indiana Chamber of Commerce, Scott Davison, chief executive of the insurer OneAmerica, said mortality among insured people aged 18 to 64 was 40% above pre-pandemic levels in the third quarter of 2021, whereas a one-in-200-year catastrophe would have meant 10%. For the general population, the Society of Actuaries measured an actual-to-expected death ratio of 122% for April through December 2020 and 117% for 2021, highest at ages 35 to 64.
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