Ratings agency, AM Best says “bad news for those hoping that mortality patterns would magically return to normal as the COVID-19 pandemic subsides. This excess mortality seen during the past several years is likely to be sticky.”
The comments were part of an opinion roundup compiled by the ratings agency, entitled Pandemic Could Leave Excess Mortality Levels High for Some Time.
Quoting Houston Perrett, an actuary with Fortitude Re, the firm says actuaries need to consider whether the pattern of excess deaths will persist into 2023 and the insurance industry needs to figure out a way to incorporate that data into their assumptions.
“It is important as practitioners to be mindful that excess mortality is sticking around and we need to be conscious of how we’re going about to include that in our experience studies, in our mortality studies, to determine whether or not it’s appropriate for our specific blocks of business to see that,” Perrett said. “The new normal is still elevated to what we were seeing prior to the pandemic. The reasons behind that? There are probably dozens.”
Although the report focuses on U.S. mortality levels saying excess mortality and morbidity trends, three years after the start of the pandemic, have not yet returned to the pre-pandemic baseline, in Canada, Statistics Canada recently reported that COVID-19 was the fourth leading cause of death in the country in 2022.
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“Those setting life assumptions need to take a more focused look at the data and avoid large-scale conclusions,” adds Kimberly Steiner, senior director at Willis Tower Watson’s U.S. life business. “It’s important to look at a more granular level and assess at a more granular level whether we think trends are going to persist for various age groups. We’re not going to be able to look at it on the aggregate level.”
