New report reveals bigger picture of COVID's impact on life insurance claims

New report reveals bigger picture of COVID's impact on life insurance claims | Insurance Business Canada

New report reveals bigger picture of COVID's impact on life insurance claims

The latest report from the Canadian Institute of Actuaries (CIA) offers a bigger picture of how the COVID-19 pandemic has impacted life insurance claims made in the past couple of years.

The report – Report 6: COVID-19 Canadian Insurance Industry Monthly Aggregate Data Analysis, the sixth and final in a series – covers the effect of the pandemic on Canada’s life insurance industry.

According to the CIA’s report, COVID-related individual insurance claims represented 13% of total claims during the peak of COVID-19’s first wave in April 2020. During the second wave, COVID-related death claims reached 11% of total individual claims in January 2021, while group insurance claims jumped 6.8% in the same month.

The Omicron variant of the virus impacted life insurance claims to a lower extent, the report also found. It reached a high of 7.5% in January 2022 for individual insurance and 3.5% in February 2022 for group insurance.

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CIA additionally noted that claims appeared to decrease after the first quarter of 2022, but the lag in reporting some claims is expected to lead to an increase in the number of claims made in Q2 2022.

In concluding its report, the CIA mentioned that although Canada “will likely experience additional waves of COVID-19 infections,” the level of excess deaths and the impact on life insurance claims are expected to be lower than what has been observed in the past few years. Thus, this is the final report the CIA is making on monthly aggregate claims data.

“The data analyzed in this COVID-19 report series will help actuaries better understand and manage the impact of the pandemic on insurance companies, while fulfilling their roles in risk management and financial stability in the industry,” said CIA Research Council’s Experience Research Committee chair and report author Nicolas Genois, FCIA.

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The CIA’s report comes a month after the Canadian Life and Health Insurance Association (CLHIA) released its own report, which found that for 2021, Canadians were paid a record-breaking over $113 billion in benefits from life and health insurance products as well as retirement products.