Analysts at Credit Suisse have raised their full-year COVID-19 mortality estimate for the US to 275,000, having previously issued a figure of 210,000 in July.
The firm says the significant increase in mortalities due to the pandemic could increase the impact to US life re/insurers.
Credit Suisse’s estimates now reflect roughly 80,000 COVID-induced mortalities in the US during Q3, compared to its prior base case estimate of 60,000.
It is also forecasting 75,000 mortalities in the fourth quarter of the year, versus a previous base case estimate of 25,000.
Additionally, analysts have now compiled a mortality estimate of 45,000 for the first quarter of 2021, which assumes some improvements from increased testing & tracing, more effective treatments, and the possible introduction of a vaccine.
Of the US life re/insurers analysed by Credit Suisse, RGA is thought to be most exposed to the increase in mortalities.
RGA cites a $15 million to $25 million pre-tax hit for every 10,000 US mortalities, along with a $4 million to $6 million hit for every 10,000 UK mortalities and a $10 million to $15 million hit for every 10,000 Canadian mortalities.
Other companies with relatively high exposure include Brighthouse Financial (whose cited sensitivity implies 3Q20 COVID mortality losses representing 5.2% of 2019 adjusted earnings), Lincoln National (4.3%), Globe Life (1.7%), and Equitable Holdings (1.6%).
However, Credit Suisse added that it does not anticipate a material capital or book value impact for any insurers.
On this point, analysts said that companies lowered their guided COVID-19 mortality sensitivities by an estimated average of 40-50% in Q2 compared with guidance at Q1 this year.
Notably, several companies also cited lower impacts from COVID-19 on insured populations relative to the general population.