The Longevity Science Panel, supported by Legal & General, has released the report ‘The Covid-19 Pandemic’. It’s a one-stop resource to help risk managers and decision makers navigate through a range of key drivers of the pandemic such as variants, immunity and socio-economic gap, bearing in mind that the pandemic is still evolving. In the coming RiskMinds Insurance conference in December, Joseph Lu, Director, Longevity Science at Legal & General, will discuss the following key points relevant to risk management in life insurance and annuities.
The pandemic has cost an estimated 165k lives in the UK and 5m lives globally, and while its impact has been profound, approximately 76% of total Covid-related deaths were in patients in the top 5% for highest predicted risk. These risk factors are varied, including everything from heart disease to obesity. By far the most substantial of these is age. Potential contribution of deaths related to Covid-19 in the next few years remains unknown, requiring continued monitoring. Insurers would need to take account of age and risk profiles of their customers, such as younger insured customers or older annuitants.
The emergence of variants of the SARS-CoV-2, such as the Alpha and Delta variants, have led to rapid spreads in parts of the world notably in India, the UK, and US. The potential emergence of faster-spreading, more fatal or vaccine-evading variants is a risk going forward. However, effective vaccination programmes could also mean that Covid-19 would become more manageable like the ‘common cold’. We need to keep an eye on international surveillance of variants.
At least 20 vaccines have been approved globally against the SARS-CoV-2, with more in the pipeline. In general, they markedly reduce hospitalisation and death rates, but may not fully prevent future infection and transmission. This ‘leakiness’ when combined with the risk of waning immunity and slower vaccine rollout in some countries could lead to continued circulation of the virus globally. This means that we would still need to watch the development of the pandemic in the near future, even when daily activities are becoming more ‘normal’ with reducing social restrictions in many countries.
The National Health Service (NHS) in the UK, though under pressure, has been adept, innovative, and resilient throughout the pandemic. New technologies, redeployment of staff, and increased inter-departmental collaboration have increased capacity to deal with the pandemic. Lessons learned would improve future care deliveries. However, there is a backlog in diagnosis and treatment in the NHS for other conditions which will take years to catch up. It may impact death rates as late diagnosis of major killers like cancer and heart disease lead to earlier death. The potential impact of NHS backlog has been estimated after the UK’s second wave by modellers in public health at around 25k excess deaths in the UK spread over future years. We should look out for further updates.
Gap in life expectancy between people in different socio-economic circumstances had been wide even before the pandemic. The more deprived have suffered higher rates of infection, hospitalisation, and mortality during the pandemic. An endemic Covid-19 scenario could continue to affect people in different socio-economic circumstances differently, potentially widening gap in mortality. This is relevant to the insurance and pensions sectors, especially when our customers may belong in certain socio-economic subgroups.
Improved hygiene, work from home, and mask-wearing would have suppressed influenza infection in the UK and globally in 2020. Success in managing influenza would contribute to more stable rise in longevity trends. However, there is a risk of ‘rebound’ of influenza cases due to reduced immunity from a lack of exposure to the virus and increased social interactions in the population. New cases of influenza have been subdued in 2020, following global travel restrictions. We should follow closely on new cases of influenza internationally this year and beyond, as travel restrictions ease.
Mortality improvements in many higher income countries had slowed in the decade before the pandemic. The aftermath of the pandemic on health care system, society and economy may continue to suppress mortality improvements in the near future. This is relevant to the forecasting of future mortality rates.
The pandemic has spurred developments in medical sciences, data sciences and inter-disciplinary collaboration. Health and social care sectors may receive more attention. These benefits would be invaluable in advancing future health-promoting initiatives, technologies, and know-how. These may benefit longevity.
Join Joseph Lu at RiskMinds Insurance and take part in the conversation!
