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COVID-19 Might Have Caused $2 Billion in U.S. Life Claims So Far

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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.

Another question might be what Hartford’s $38 million group benefits loss implies about overall pandemic-related life insurance claims.

The Context

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.”

Analysts at Aite Group, a consulting firm, suggested in April that the outbreak could cause a total of $4.8 billion to $7.2 billion in U.S. life insurance claims.

At this point, government figures have suggested that the all-cause death rate may have been more than 10% higher than normal for only a few weeks in April.

Hartford and the U.S. Life Insurance Market

Hartford appears to account for about 4% of the 115 million U.S. people covered through the group life market, and, roughly, 2% of the 267 million insureds covered by individual life, group life and credit life, according to market share data compiled by the Insurance Information Institute, and group life market size data compiled by the American Council of Life Insurers.

If Hartford’s claims turn out to be similar to COVID-19-related death claims for all U.S. group life insurers, and for all U.S. life insurers, it’s possible that all U.S. group life insurers may have already incurred about $1 billion in death claims, and that all U.S. life insurers may have incurred about $2 billion life claims.

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