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Life Health > Life Insurance

Pru and Unum Assume COVID-19 Deaths Will Linger

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What You Need to Know

  • Kidney disease kills about 13,000 U.S. residents every three months.
  • Diabetes kills about 22,000 U.S. residents per quarter.
  • Prudential and Unum are both expecting COVID-19 to kill more than 30,000 people in the third quarter.

Prudential Financial and Unum Group are assuming in their earnings forecasts that COVID-19 will continue to be a leading cause of death in the United States in the third quarter.

Prudential’s earning forecast for the third quarter includes 30,000 U.S. COVID-19-related deaths.

Unum assumes that COVID-19 will kill 40,000 U.S. residents in both the third quarter of the year and the fourth quarter.

Executives from the companies talked about those assumptions this week during conference calls with securities analysts. The companies held the calls to go over earnings for the second quarter, which ended June 30.

COVID-19 has killed about 615,000 people in the United States since March 2020.

The pandemic caused about 200,000 U.S. deaths in the first quarter of this year, and about 52,000 U.S. deaths in the second quarter.

Pandemic Comparisons

COVID-19 still trails the 1918-1919 flu pandemic as a cause of U.S. deaths. The 1918-1919 flu pandemic killed 675,000 people in the United States, at a time when the country had a population of just 100 million.

Here are the U.S. death toll estimates for other famous pandemics:

  • Asian Flu (1957-1958): 69,800 deaths
  • Hong Kong Flu (1968): 33,800 deaths
  • H1N1 (2009): 12,469 deaths

Life and health insurers have been expressing relief that the COVID-19 death toll in the second quarter was much milder than the death toll in the first quarter.

If COVID-19 killed a total of 82,000 Americans in the second quarter and third quarter of this year, the U.S. death toll just for that period would exceed the death toll for any modern-era pandemic other than the 1918-1919 flu pandemic.

Leading Cause of Death Comparisons

If COVID-19 kills 30,000 Americans this quarter, that will make it one of the top eight causes of death in the United States during that period.

Here are the top seven causes of death in the United States, and an estimate of the number of U.S. deaths associated with each of those causes per quarter.

  1. Heart Disease: 165,000 deaths
  2. Cancer: 150,000 deaths
  3. Accidents: 43,000 deaths
  4. Chronic Lung Diseases: 39,000 deaths
  5. Stroke: 38,000 deaths
  6. Alzheimer’s Disease: 30,000 deaths
  7. Diabetes: 22,000 deaths

These figures mean that, if Prudential’s death toll prediction is correct, COVID-19 could kill more Americans than diabetes this quarter.

If Unum is correct, COVID-19 might be responsible for more deaths than any factors other than heart disease, cancer and accidents.

Patient Demographics

Originally, Unum was hoping that vaccinations would continue to lead to sharp decreases in the numbers of new COVID-19 cases and deaths in the second half of this year.

Richard McKenney, Unum’s CEO, said Wednesday that the company’s views have changed because of the rise of the COVID-19 delta variant strain. The company is now assuming that COVID-19 mortality will improve, but only slightly, in the third and fourth quarters.

“What we are watching now is that the delta variant is impacting a younger, unvaccinated population that has different dynamics from what we have seen to date from COVID-19,” McKenney said. “There is room for optimism, though, as we have started to see employers looking at the role that they might play in getting more of the population vaccinated.”

Steve Zabel, Unum’s chief financial officer, said Unum originally assumed that about 1% of the Americans who died from COVID-19 would have Unum life insurance.

Now, because the people dying from COVID-19 are younger and more likely to have life insurance, Zabel is thinking that the number of pandemic-related life insurance claims it receives will be about 1.5% of the total number of U.S. deaths, and that is one of the factors dampening the company’s earnings expectations for the second half of the year.

Disability Insurance

U.S. insurers’ disability insurance claims have looked fairly stable during the pandemic, possibly because a decrease in claims resulting from causes other than COVID-19 has offset any influx of claims from “COVID long haulers.”

But Zabel said that leave and short-term disability claim volumes have been elevated because of the delta variant, and that this is another factor leading to a slight dampening of Unum’s earnings expectations for the second half of the year.

“We do think that the group disability loss ratio is going to stay elevated, about where it is right now, for the remainder of the year,” he said.

(Image: Adobe Stock)


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