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Life 'Mortality Improvement' Team Faces COVID-19

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Actuaries are talking to state insurance regulators about a future in which death makes a comeback.

The actuaries are part of the Mortality Improvement Subgroup, which, in turn, is an arm of one panel at the American Academy of Actuaries and a panel at the Society of Actuaries (SOA). The subgroup has been helping life insurers adjust their product reserves, and prices,  to reflect the fact that Americans keep living longer.

Opioid use has reversed that improvement, a bit, in some years, but actuaries are still debating how much opioid use has affected people with life insurance and annuities.


  • Links to Life Actuarial Task Force resources are available here.
  • An article about the effects of opioid use on people with life insurance is available here.

Now members of the mortality improvement subgroup are wondering what kind of an effect COVID-19 might have.

Dale Hall, managing director of research at the Society of Actuaries, was set to brief state insurance regulators on the topic today, at a web-based meeting of the National Association of Insurance Commissioners’ Life Actuarial Task Force.

The task force helps state insurance regulators regulate life insurers’ use of math and statistics.

The Mortality Improvement Subgroup has been working mainly with Social Security Administration data for the period from 2013 through 2019, according to a Hall presentation slidedeck included in a task force meeting packet.

That analysis shows solid mortality improvement for young adults and people in their 70s, along with some deterioration for people in their late 20s and early 30s.

Hall has also included a section on considerations for 2020s and beyond.

“We don’t have sufficient data to fully understand the impact of the COVID-19-related mortality shock on the insured population,” according to the slidedeck. “Anecdotal reports from companies indicate they are seeing a smaller shock.”

Here are some considerations for including the effects of COVID-19 in future mortality improvement actuarial work, according to the slidedeck:

  • Knowing how and when access to an effective vaccine might affect the duration of the COVID-19 shock.
  • Deciding whether COVID-19 is causing a short, one-time shock that should be included in capital planning, or a long-lasting problem that should be included in product reserves.
  • Understanding what kinds of long-term effects COVID-19 might have on the people who survive the pandemic. Those effects could include COVID-19-related damage to the disease survivors’ health, and it could also include the effects of lack of access to preventive care and routine care on people who never came down with a serious case of COVID-19.
  • Analyzing how COVID-19, in some cases, might have simply caused some deaths to occur a little earlier than they would have occurred if COVID-19 had not come along.

The Mortality Improvement Subgroup applied its ordinary methodology to the effects of the severe 2008-2009 influenza season and the effects of the opioid epidemic, without making any special adjustment, according to the slidedeck.

At this point, the subgroup is not planning to make any special methodology changes in response to the COVID-19 shock event, according to the slidedeck.

An increased U.S. death rate could have an obvious effect on life insurance death claims.

An increased death rate could have a mixed effect on the performance of blocks of individual annuities. Premature deaths may reduce annuity income benefits obligations, but contract death benefit features may offset part or all of the savings related to income benefits.

— Read Regulators May Build Methuselah Risk into RBC Ratioson ThinkAdvisor.

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