Life insurance claims in the US could amount to $7.2bn if the Covid-19 death toll approaches the upper estimate of 150,000, according to market analytics firm Aite Group.
According to the Boston company’s estimates, even if mortality numbers don’t hit this peak, the industry still stands to take at least a $4.8bn hit in claims.
The death toll passed 60,000 yesterday (29 April), and shortly after President Trump told reporters he wouldn’t be extending the country’s social distancing guidelines.
The report author Samantha Chow told Bloomberg that even if deaths did hit 150,000, life insurers were prepared and would be able to take the hit.
Her opinion appears to square with that of financial ratings agency Moody’s, which released its own report yesterday to show that even in its stress-test scenario, in which the industry faces $160bn in life insurance claims, it’s reinsurers that would be hit hardest.
It read: “Gross pandemic claims in our stress scenario would in all cases exceed 100% of US capital and in some cases would excess US capital even in the higher end of our base range.
“We therefore believe that life reinsurers would be hurt significantly more by a pandemic than primary companies.”