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Life Health > Annuities

Vaccines Should Shield Life Insurers From COVID-19 Variant Deaths: RGA

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What You Need to Know

  • RGA executives say vaccines held delta variant mortality down to manageable levels in the United Kingdom.
  • The reinsurer expects COVID-19 mortality to be more of a concern in markets, like India, that have had low vaccination rates.
  • The company's chief risk officer says Americans with life insurance are probably more likely to be vaccinated than members of the general population are.

Executives at Reinsurance Group of America (RGA) say they are optimistic about the power of vaccines to protect life insurers against deaths caused by COVID-19 virus variants.

Patients suffering from the delta variant strain have been crowding hospitals in places like Arkansas, Florida, Mississippi and Texas in recent days.

Federal officials in Washington have warned that the delta variant spreads much more easily than other variants observed to date, and that even vaccinated people who are infected can spread the it.

But Anna Manning, RGA’s CEO, said Tuesday that COVID-19 vaccines have done a good job of holding down the death rate in the United Kingdom and other countries that have faced severe waves of delta variant infections.

“Given the vaccine levels in all our key markets of the U.S., the U.K. and Canada, we expect COVID-19 claims to decline in the second half of the year,” Manning said. “In India and South Africa, we will likely see some continuation in COVID-19 claims through the remainder of the year but at manageable levels.”

RGA has been watching COVID-19 illness and death rates closely because, as a reinsurer, it serves as the insurer for life insurance, health insurance and annuity issuers around the world.

Any big increases in the “direct writers” COVID-19 claims could lead to spikes in the Chesterfield, Missouri-based company’s own claim costs.

Jonathan Porter, RGA’s chief risk officer, observed that the recent delta variant wave in the United Kingdom pushed daily infection counts close to the all-time high, but that the mortality rate associated with that wave was less than 10% of the all-time peak mortality rate.

The delta variant could hurt people in areas of the United States with low COVID-19 vaccination rates, but people with more education seem to be more likely than other people to be vaccinated, Porter said.

If people with more education are more likely to be vaccinated, that’s an indication that people with life insurance are probably more likely to be vaccinated, he said.

The Earnings

Manning and Porter talked about COVID-19 vaccines during a conference call RGA held to go over its earnings for the second quarter. The quarter ended June 30.

RGA is reporting $344 million in net income for the second quarter on $4.1 billion in revenue, up from $158 million in net income on $3.6 billion in revenue for the second quarter of 2020.

RGA’s U.S. and Latin America traditional reinsurance business is reporting $135 million in operating income before income taxes for the second quarter on $1.8 billion in revenue, compared with a $158 million pre-tax operating loss on $1.6 billion in revenue for the year-earlier quarter.

The easing of the COVID-19 pandemic helped cut RGA’s ratio of claim costs to revenue to 89.9% from 107.2% in the year-earlier quarter.

Here’s what happened to the account values for certain types of annuities RGA reinsures between the second quarter of 2020 and the latest quarter:

  • Deferred Fixed Annuities: $14 billion (up from $11 billion)
  • Indexed Annuities: $3.3 billion (down from $3.5 billion)
  • Variable Annuities: $3.2 billion (up from $2.8 billion)


Pictured: Anna Manning (Credit: Geneva Association)


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