The first and second waves of the COVID-19 pandemic noticeably impacted individual insurance claims across Canada, according to a new analysis from the Canadian Institute of Actuaries (CIA).
In a recently released paper, the CIA released the findings of an ongoing analysis of aggregate data submitted by Canadian life insurance companies including Canada Life, Manulife, Sun Life, The Co-operators, Foresters, RBC, SSQ, Industrial Alliance, Assumption Life, Equitable Life, Humania Assurance, La Capitale, Wawanesa Mutual Insurance.
“The data collected include data on exposure, total insurance claims, and claims related to COVID-19 at an aggregate level monthly, covering both individual and group lines of business,” the CIA said. The sample period for the data included in the analysis spanned January 2019 until May 2021, during which the country went through three waves of COVID.
While the life insurance companies weren’t able to consistently collect data on cause of death, most were able to provide data on COVID-related deaths.
Among the companies that provided data on individual claims, 12 reported COVID-related claims separate from other claims. A total of 3,244 reported individual claims were identified with COVID-19 as cause of death in 2020; 1,678 more were reported from January 2021 to May 2021.
Very few claims were identified as due to COVID-19 in January to March 2020. Still, aggregate individual claims for that period exceeded the comparable monthly equivalent amounts during the same months in 2019, which the CIA said makes it possible that life insurance claims were already seeing a COVID impact even before April.
To make the data more comparable, researchers divided each month’s claims amount by the total exposure as reported at the start of the year of those claims. Based on that calibration, they found monthly claims in 2020 exceeded 0.02% in every month other than June and July.
“The monthly aggregate individual insurance claims in all but one of the months in 2020 exceeded the comparable monthly aggregate amounts for the same months in 2019,” the report said. The sole exception, July, was a point in 2020 when the pandemic’s impact was relatively limited.
As the second wave of COVID-19 in Canada receded, the trend in individual insurance claims moderated to a level more consistent with that seen in 2019. Consistent with the pattern of excess deaths in the overall Canadian population, individual insurance claims increased in May 2021, but still remained below the elevated level seen in 2020.