The second wave of Covid-19 had a significant impact on life insurance claims, says a report from the Canadian Institute of Actuaries (CIA) released on Wednesday.
In December 2020, individual life insurance claims related to Covid-19 reached the second-highest monthly total of the year, hitting about 75% of the peak level of Covid-related claims recorded in April of last year, the report said.
Claims totalled $30.8 million in December and $41.44 million in April. The number of individual claims related to Covid-19 in those months were 630 and 899, respectively.
The CIA’s quarterly report analyzed data from January 2019 to December 2020 provided by 13 insurers, including Canada Life, Manulife, Sun Life, RBC and Industrial Alliance.
The institute has been collecting insurers’ data to ascertain whether the overall level of life insurance claims during the pandemic last year was different from previous years and whether Covid-19 is a significant cause of death for insurance claims in Canada.
December’s individual life insurance Covid-related claims accounted for 9.6% of total individual life insurance claims that month, the report said. That was down slightly from the peak in April (12.9%) and May (10.9%) but up significantly from the low of less than 1% in August.
The level of individual life insurance claims in almost every month last year increased compared to 2019, the report found.
When monthly aggregate claims amounts were calibrated by dividing each month’s claims amount by the total year exposure as reported at the start of the year, monthly claims in 2020 exceeded 0.02% in every month other than June and July. That level was exceeded in only one month in 2019, the report said.
The sample insurers recorded a total of 3,179 individual claims that identified Covid-19 as cause of death in 2020.
In group life insurance, claims in the first half of last year were mostly consistent with the level of claims in 2019.
However, in the second half of 2020, aggregate monthly claims (after calibration) in some months — such as October — were greater compared to 2019.
As additional claims continue to be reported for the later months of 2020 due to reporting lags, “it is reasonable to assume that November and December 2020 will also exceed the equivalent months in 2019,” the report said.
The institute said it will continue to collect and analyze data as long as new or additional insight can be gleaned.
“The CIA is committed to this ongoing data collection to help Canada’s decision-makers manage the future impacts of the pandemic on the industry, mitigate risks and ensure financial stability,” Keith Walter, chairman of the CIA Research Council, said in a release.