Hartford Financial Services Group has given investors a small clue hinting at what might be happening with life insurance and disability insurance claims related to COVID-19: It said it has incurred about $38 million in outbreak-related group benefits claims, before income taxes.
The group benefits losses “relate mostly to group life claims,” Hartford said.
- A copy of Hartford’s preliminary results announcement is available here.
- An article about the new COVID-19 hospitalization wave is available here.
Ryan Krueger, a securities analyst with Keefe, Bruyette & Woods, has pointed out that, for Hartford, all by itself, $38 million in claims amounts to just 2.8% of quarterly premiums.
“Assuming 80% of the claims are group life, this would add roughly 5 points to the group life loss ratio,” Krueger says.
What Your Peers Are Reading
Another question might be what Hartford’s $38 million group benefits loss implies about overall pandemic-related life insurance claims.
The United States normally has about 2.8 million people dying from all causes per year. In other words: About 0.86% of Americans die every year.
Reinsurance Group of America executives have released estimates suggesting that, if a pandemic caused the death rate for U.S. people with life insurance to increase by more than 18% over the normal level for an entire year, RGA would think of that as a “200-year event pandemic.”