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COVID-19 Driving Group Life Deaths Past 200-Year Event Levels: OneAmerica

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What You Need to Know

  • J. Scott Davison says OneAmerica group life mortality is about 40% higher than normal.
  • About 84% of the workers at OneAmerica are vaccinated against COVID-19.
  • Primerica is emphasizing strong sales and its ability to help middle-income households cope.

Two term life insurance issuers are emphasizing that the COVID-19 pandemic has had a terrible effect on workers with term life insurance.

J. Scott Davison, the CEO of OneAmerica, said last week at an online press conference organized by the Indiana Chamber of Commerce and the Indiana Hospital Association that the death rate of people ages 18 through 64 is now 40% higher than normal, and well above what the life insurer had believed to be the 1-in-200-year-event level.

“We’re seeing right now the highest death rates we have ever seen in the history of this business,” Davison said.

Death rates climbed in the third quarter of 2021 and have stayed high, and group disability insurance claim rates are also up, Davison said.

Other term life issuers appear to be seeing similar increases in life insurance claims for working-age people, he added.

Davison noted that about 84% of OneAmerica’s own workers are vaccinated.

The vaccinated workers “want no part in working in an open office environment with unvaccinated people,” Davison said.

OneAmerica has added a vaccine mandate for its own workers because of concerns that it would be unable to attract and keep employees if it did not have one, Davison added.

OneAmerica is based in Indianapolis.

The press conference that featured Davison was organized to promote vaccination efforts in Indiana. Kevin Brinegar, the Indiana chamber president, said in introductory remarks that the chamber wanted to emphasize the severity of the impact of the current COVID-19 spike on Indiana’s hospitals and employers.

The Center Square, an arm of the Franklin News Foundation, broke the story about Davison’s remarks. The center says it aims to reach “an audience that seeks balanced state-focused view with a taxpayer’s sensibility.” John Tillman, the chairman of the foundation, won an award from the State Policy Network for efforts to advance the free market philosophy.

Another foundation board member, Bradley Walton, president of Signature Advisors Group. He holds the Chartered Life Underwriter professional designation and has served on the AALU Business and Estate Planning Committee. AALU is now part of Finseca.

Primerica’s Numbers

In separate news, Primerica announced Tuesday, in a public summary of projected production results it shared at a sales meeting, that it estimates that it sold $109 billion in new term life insurance in 2021 and increased the total of term life in force to more than $900 billion.

The Duluth, Georgia-based insurer reported $109 billion in new term life sales in 2020 and ended that year with $859 billion of term life coverage in force.

Primerica also said it paid $2.1 billion in term life death claims in 2021. That’s up from $1.7 billion in spending on death claims and other forms of term life benefits in 2020, and up from $1.4 billion in 2019, before the COVID-19 pandemic begin.

Glenn Williams, Primerica’s CEO, said the death benefits helped families in their time of loss.

“With over $900 billion of term life in force, we are positioned to protect more households in the future,” Williams said.

What the News Means

The Centers for Disease Control and Prevention has been posting data since this past summer suggesting that death rates for working-age people have been far above normal.

Executives from some life insurers said when they released earnings for the third quarter of 2020 that the increase in mortality rates for working-age people had surprised them.

One question was whether that spike in working-age mortality would fall as more working-age people received vaccinations against COVID-19, and another was whether the effect of the working-age mortality rate increase was affecting certain types of life insurers, or life insurers in certain locations.

Davison’s observations and Primerica’s figures appear to indicate that the pandemic is having a significant effect on many life insurers.

Primerica has accounted for a 2% share of U.S. life insurance death benefits payments in recent years. The $700 million extra the insurer has spent on life claims resulting from COVID-19 and pandemic-related disruption implies that U.S. life insurers as a whole may have paid about $35 billion in pandemic-related claims since early 2020. In November 2021, when life insurers were releasing their third-quarter earnings, death claim figures from MetLife implied that life insurers might have paid about $32 billion in pandemic-related claims as of the end of the third quarter.

Correction: Primerica’s 2019 term life insurance death benefits payments were described incorrectly in an earlier version of this article. Primerica spent $1.4 billion on term life death benefits in 2018 and $1.7 billion 2019.

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J. Scott Davison (Photo: OneAmerica)