It's Too Early to Size 2019-2020 Flu Mortality: RGA

Executives from Reinsurance Group of America Inc. say it’s too early to know how either the current influenza season or the new coronavirus might affect the life and annuity reinsurance business.

But RGA executives did give some details about how they analyze the risk that severe, widespread disease outbreaks could lead to a spike in life insurance and health insurance claims.

Resources

• The U.S. Securities and Exchange Commission’s Fast Search company filing search tool is available here. Enter the company’s stock symbol (such as, RGA for RGA) in the search form to see the official earnings filings.
• An article about RGA’s latest numbers is available here.

RGA executives talked about mortality trends Wednesday, during conference call the company held to go over earnings for the fourth quarter of 2019 with securities analysts.

RGA is a Chesterfield, Missouri-based company that provides what amounts to insurance life, health and annuity issuers. It also has risk management experts who help insurers analyze their exposure to major flu pandemics and at other life and health catastrophes.

During many quarterly life insurer and life reinsurer earnings calls, the analysts ask mainly about matters such as interest rates and stock buybacks.

During the latest call, the analysts asked several questions about flu and coronavirus mortality.

Flu

Anna Manning, RGA’s chief executive officer, said the U.S. flu season did get off to an early start.

But “it’s too early to predict what that means, from a mortality impact standpoint, for the season,” Manning said.

Australia is in the southern hemisphere of the Earth, and its flu season typically peaks in what are the summer months in the northern hemisphere.

This year, the flu season in Australia looked bad in the beginning but ended the year quietly, and overall mortality was about average, Manning said.

“Hopefully, the U.S. will have a similar mortality outcome, but it’s much too early to say,” Manning said.

The New Coronavirus

“It’s too early to provide much in terms of the virus itself,” Manning said.

But Manning did tell the analysts about the geographical distribution of RGA’s traditional mortality business exposure.

RGA gets about 50% of if its exposure from the United States; 35% from Canada, Europe, the Middle East, and Africa; and 12% from Asia, Manning said.

About 1% to 2% of the company’s traditional mortality exposure comes from China, Manning said.

200-Year Event Pandemics

A securities analysts said he had heard that a severe pandemic might cause 1.5 extra deaths per 1,000 people living in an affected area.

Manning said that RGA uses a hypothetical scenario involving the kind of catastrophic pandemic that might occur once every 200 years to assess the company’s ability to handle pandemics.

The risk analyses based on that 200-year event stress scenario imply an impact “not too far from the 1.5 extra deaths,” Manning said.

— Read The New Earnings Season Starts Wednesday, on ThinkAdvisor.

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