Deaths Surge Hits Insurance Company
Deaths Surge Hits Insurance Company
A leading American insurance company has revealed that it is paying out for an "unheard of catastrophe" of deaths among people aged between 18-64.
At a virtual news conference held December 30, the President and CEO of the Indianapolis-based insurance company OneAmerica, Scott Davison, released some numbers that suggest an unthinkable catastrophe is in the making.
OneAmerica is a major player in the life assurance industry. It has 2,400 employees and assets of close to $100 billion. They are in the business of insuring people against death and disability, which means they have to be able to estimate how likely it is that people at different ages will die or become disabled. If they guess wrong, they lose lots and lots of money.
OneAmerica is hemorrhaging money right now, because workers they have insured through their employers are dropping like flies, many to never rise again. In 2019, they paid out $6 billion in claims. Even in 2020, at the height of the pandemic, they paid out the same amount — $6 billion — in claims. (Most of those dying were quite elderly or, because of preexisting medical conditions, were already at high risk. Both age and health are already factored into the actuarial tables, so the company’s payouts remained the same.)
But in 2021, to listen to CEO Davison, they will be paying out much, much more.
What Davison told us at the press conference was that the working-age people his company insures are dying at a rate that is 40% higher than pre-pandemic levels. That means that for every 10 people between the ages of 18 and 64 who died each year in the past, 14 died in 2021.
Davison explains just how statistically improbable this is: “Just to give you an idea of how bad [a 40% increase] is, a three-sigma or a 1-in-200-year catastrophe would be 10% increase over pre-pandemic. So 40% is just unheard of.”
In other words, what is happening is not just a “catastrophe” but is an unimaginable disaster that the company’s actuaries, even in their worst nightmares, never anticipated. The whole insurance model is based on the fact that individual deaths and ages of death always average out, so the total varies little from year-to-year and the normal figures are broadly predictable.
But now, they've shot off the scale. Others in the insurance industry are seeing the same unusual rise in claims. Per Davison: “We are seeing, right now, the highest death rates we have seen in the history of this business – not just at OneAmerica. The data is consistent across every player in that business.”
A quick check of a few of OneAmerica’s competitors confirms Davison’s claims. Prudential paid out 87% more in death benefits in the third quarter of 2020 than it did in the third quarter of 2021. Pacific Life and Annuity claims are up by over 80%. New York Life doesn’t break down its data by quarter, but by September 30, 2021, it had paid out 27% more in death benefits than in 2020. Most of the excess deaths occurred in the last two quarters of the year, that is to say, after the rollout of the vaccines.
And the bad news does not end there. Davison also said that his company was also seeing an “uptick” in both short-term and long-term disability claims, saying that initially it was mostly short-term disability claims, but of late the increase is in long-term disability claims. “For OneAmerica, we expect the costs of this are going to be well over $100 million, and this is our smallest business. So it’s having a huge impact on that,” he said.
At the same news conference where Davison spoke, Brian Tabor, the president of the Indiana Hospital Association, said that hospitals across the state were being inundated with patients “with many different conditions,” concluding that “unfortunately, the average Hoosiers’ health has declined during the pandemic.”
In a follow-up call, Tabor said he did not have a breakdown showing the conditions or ailments for which so many people in the state were being hospitalized. But he did confirm that the extraordinarily high death rate reported by Davison matched what hospitals in the state were seeing.
Ignoring the COVID vaccine elephant in the room, both Davison and Tabor professed to have no idea what is causing this huge increase in mortality rates among otherwise healthy individuals of working age. But Davison, for his part, seems to have ruled out any connection with the vaccines, to judge from his recent dictat to all his employees that they must be vaccinated. We guess that the company will be paying out a few claims filed by its own employees in the coming year.