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RGA reports latest results, impact of Covid in key markets

16th May 2022 - Author: Pete Carvill

RGA is reporting an increase in Covid-19 deaths in the general population in many of its key markets.

Reinsurance Group of America logoThe news, unveiled at the company’s Q1 2022 earnings call, said that in comparison with Q4 2021, deaths were up in many of its key markets. Jonathan Porter, EVP and global chief risk officer at the firm, said that deaths in the general population were up 20% in the US, 40% in the UK, and nearly triple in Canada. The proportion of COVID-19 population deaths at ages below 65, ages where there is more life insurance exposure, declined to 24% from the Q3 2021 peak of 42%.

Despite this, Porter said that the firm was maintaining its stated claim cost rules of thumbs for the three territories.

He added: “We are encouraged that Q1 claim cost per 10,000 deaths have decreased relative to the impacts observed during the Delta wave peaks in Q3 and Q4, and are now more in line with the midpoint of our ranges.”

He went on: “Our U.S. individual mortality results are very consistent with what we are seeing in the general population this quarter. Our COVID-19 mortality claim costs of $260m were material given the high level of population deaths, but we saw a reduction in our claim cost per 10,000 general population deaths as compared to Q3 and Q4 of 2021. This improvement, we believe, is in part due to the lower proportion of deaths in working ages as shown in the CDC data.”

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RGA also reported that Covid-19 mortality claims were $20m, double those of the preceding quarter. This was, it said, a lower increase than observed in the general population deaths, and Q1 results also include the impact of one very large COVID-19 claim. It said that excluding this one claim wound result in Q1 COVID-19 impacts in Canada being within its rules of thumb range for claim costs per 10,000 general population deaths.

Porter added: “In the U.K., COVID-19 mortality claim costs were also within our expected range based on general population deaths and similar to full year 2020 results after being elevated for much of 2021.”

He concluded: “So far, in Q2, COVID-19 general population deaths in the U.S. and other key markets have remained at relatively low levels when compared to Q1, and we are cautiously optimistic that future impacts will continue to decline in severity due to higher population immunity from vaccination and prior infection as well as increasing access to more effective treatments. Uncertainty persists, but we remain confident that impacts will be manageable.”

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