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November 03, 2023 at 01:35 PM
A top U.S. life reinsurance executive believes that the overall U.S. death rate continues to be noticeably higher than it was before the COVID-19 pandemic surfaced, in early 2020.
Neil Sprackling, the CEO of Swiss Re’s Life & Health Re US Americas unit, said in an interview this week that the gap seemed to be about 2% to 3% in the first half of this year, even after actuaries adjusted for factors such as the aging of the population.
The gap widened to 5% in the third quarter.
Sprackling wants teams like the Individual Life COVID-19 Project Work Group to study the gap and find out why it exists.
“This is a very complex area,” he said.
What it means: COVID-19 may no longer be swamping hospital intensive care units and filling morgues, but it could still be be acting as a slow, quiet, steady drag on the retirement savings environment.
At this point, Sprackling said, he thinks a U.S. mortality gap of about 2% might linger until 2030.
Sprackling noted that Swiss Re has already taken the persistent increase in mortality into account in its operations, by increasing life reinsurance prices and changing the assumptions used to design and analyze products.
Swiss Re: As a reinsurer, Swiss Re acts as an insurance company for insurance companies. It also gathers data that insurers can use to improve their products and operations.
In 2016, Swiss Re backed a Johns Hopkins University student team that analyzed a proposed Pandemic Emergency Facility that might be set up by members of the Group of Eight, or eight of the world’s richest countries.
The team startled many by predicting that a disease outbreak comparable in severity to the 1918 flu pandemic could cause $4 trillion in total economic damage.
A team at the University of Southern California estimated in March that the COVID-19 pandemic actually caused about $14 trillion in economic losses.
The data: Sprackling based the observations about excess mortality on Swiss Re analysis of mortality data from the U.S. Centers for Disease Control and Prevention and other government agencies, not Swiss Re’s own claims.
