Despite the unprecedented impacts of the COVID-19 pandemic and elevated mortality in many parts of the world, demand for life reinsurance “continues pretty much as it has,” according to Alain Néemeh, Senior Executive Vice President and Chief Operating Officer (COO) at Reinsurance Group of America (RGA).
Since the arrival of the global pandemic and subsequent government enforced lockdowns around the world, there’s been an expectation for heightened demand for life insurance.
And, with primary players expected to take on more risk as a greater number of individuals explore life insurance protection, it’s also been suggested in the market that demand for life reinsurance could spike on the back of the pandemic.
However, while from a direct insurance standpoint the outlook is “pretty good”, from a reinsurance perspective, “we haven’t seen much in the way of ups or downs.”
This is according to life reinsurer RGA’s Néemeh, who commented on the demand for both life insurance and reinsurance during the carrier’s first quarter 2021 earnings call.
“I think certainly the pandemic has triggered increased awareness in the population and need for insurance protection. There’s a few studies out there from LIMRA and MIB that show that the desire or the thinking about buying insurance is up quite substantially,” said Néemeh.
As an example, Néemeh explained that around 30% of consumers that were surveyed are likely to buy insurance over the next 12 months.
“So, I think, from a consumer perspective, we’re certainly hopeful that’s going to get traction. Companies have accelerated investments in digital effort to try and reach those consumers. So, I think the outlook, I would say is pretty good from a direct insurance standpoint,” continued Néemeh.
From a reinsurance standpoint, Néemeh said that “it continues to progress really along the lines that it has over the last few years.”
Adding: “Certainly, I think as reinsurers we’ve demonstrated value by working with clients to adapt to the changing conditions through the pandemic. And I think that’s generally been well regarded.
“Transactional activity continues to be good. I think when one thinks of consumer needs and sort of producing different products, our product development area is quite strong. So, I think, we can play an important part of that. But, I think, all I’ve to say, reinsurance demand I think continues pretty much as it has.”
For the first quarter of 2021, RGA reported net income of $139 million, compared with a net loss of $88 million for the prior year quarter. The result included roughly $474 million of estimated COVID-19 impacts, driven by a significant level of mortality claims in a range of geographies.