5 ms·
Working as an actuary. The only way I can make sense of this headline (GDPR block) is: normally for age X deaths Y. Of those Y there are many with health precon
by wjnc 5y ago
Working as an actuary. The only way I can make sense of this headline (GDPR block) is: normally for age X deaths Y. Of those Y there are many with health preconditions that can’t get life coverage. Now a disease hits that kills some and effects everyone (this is somewhat contrary to the usual view of corona). You can have a massive increase in deaths without preconditions even if the absolute rise is small. So their deaths are up 40% compared to the expectation of the insurer (not general mortality).
In other words: because of selection at the gate for long life you can get up to 50-70% lower premiums than the standard table assumes. So this insurer is having quite the scare.
It’s one of the reasons why many EU insurers have balanced portfolios (and are strongly favored by regulation to be balanced). Long life, short life, pensions all in a basket with reinsurance to get these risks of the books. Throw in some P&C and A&H books as well (lower incidence of traffic accidents for example) and the company could be robust to corona. Now the interest rate and inflation, that’s a different story.
- deleted 5y ago[deleted]
- red_trumpet 5y agoThis let's you circumvent the GDPR block: https://web.archive.org/web/20220102164149/https://www.thecentersquare.com/indiana/indiana-life-insurance-ceo-says-deaths-are-up-40-among-people-ages-18-64/article_71473b12-6b1e-11ec-8641-5b2c06725e2c.html https://web.archive.org/web/20220102164149/https://www.thece...
- civilized 5y agoThey're in group life so selection should be limited. And they said the deaths are mostly not COVID.
- wjnc 5y agoFrom the article: “working-age people who are employees of businesses with group life insurance policies” - that’s a quite comparable effect although indeed not via the individual health screening thus less pronounced. Those not working are quite more likely to die. What I don’t under from the article: they mention a $100 million loss on disability, but the effect of this size on mortality should be many billions.
- civilized 5y agoSomewhat smaller denominator, sure, but changes in the numerator should also be smaller for similar reasons: healthier population, employed, therefore more shielded from socioeconomic stresses around the pandemic. I sort of agree that the insurance financial risks associated with a low mortality population can be high in unusual situations, but it's not a blanket explanation for any particular situation.