Group Life Insurers Talk About Q1 Death Rates
Five early earnings releases suggest that better is not the same as normal.
The first life insurers to report earnings for the first quarter are posting similar group life benefits ratio figures: The ratios are much lower than they were in the first quarter of 2022 — but still noticeably higher than in 2019, before the COVID-19 pandemic began.
Hartford, MetLife, Prudential Financial, Unum and Voya are large group life providers that have already released their first-quarter results, with the group life benefits ratios presented in a similar format.
The average group life benefits ratio at the five insurers was 86% in the latest quarter, up from 81% in the first quarter of 2019.
For a look at the companies’ numbers, see the table below.
What It Means
The total death rate for working-age people may still be high enough to push up life insurance prices, and to add uncertainty to the life expectancy projections behind annuity prices and retirement planning efforts.
The Numbers
The five big group life insurers use different terms to describe their group life benefits ratios. The ratios reflect deaths from all causes, not just from COVID-19.
The insurers have not put the same kinds of figures for individual life insurance in their quarterly earnings releases or in the other quarterly filings now available in the U.S. Securities and Exchange Commission’s Edgar filing database.
Although the insurers’ average group life benefits ratio is about 5 percentage points higher than it was before the pandemic came to light in early 2020, the current numbers look much better than in the first quarter of 2022, when a catastrophic wave filled urgent care clinics and hospitals.
In the first quarter of 2022, group life death claim counts were about 20% higher than the average recorded during the three-year period from 2017 through 2019, according to a team at the Society of Actuaries.
Executives’ Views
Rob Falzon, Prudential’s vice chair, touched on the new group life mortality figures during a conference call held to discuss first-quarter earnings with securities analysts.
“While elevated, mortality improved compared to the year-ago quarter,” Falzon said. “COVID has transitioned to an endemic phase.”
Caroline Feeney, the head of Prudential’s U.S. businesses, noted that the extra deaths in the first quarter were due partly to conditions such as the flu, not just to COVID-19.
“The overall trend is better than in the two previous winters, reinforcing our belief that we will return to pre-pandemic mortality levels in the long term,” Feeney said.
Q1 Group Life Benefits Ratios
… | Group Life Loss Ratio… | Change, in percentage points… | |
---|---|---|---|
…… | …Q1 2023… | …Q1 2019… | …… |
…MetLife… | …90.5%… | …85.3%… | …5.2… |
…Prudential Financial… | …92.9%… | …89.0%… | …3.9… |
…Unum… | …75.0%… | …70.9%… | …4.1… |
…Hartford… | …86.7%… | …81.3%… | …5.4… |
…Voya… | …84.9%… | …78.6%… | …6.3… |
…MEDIAN… | …86.7%… | …81.3%… | …5.4… |
…AVERAGE… | …86.0%… | …81.0%… | …5.0… |
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