Pru and Unum Assume COVID-19 Deaths Will Linger

If Unum is correct, COVID-19 might be responsible for more deaths than any factors other than heart disease, cancer and accidents.

Patient Demographics

Originally, Unum was hoping that vaccinations would continue to lead to sharp decreases in the numbers of new COVID-19 cases and deaths in the second half of this year.

Richard McKenney, Unum's CEO, said Wednesday that the company's views have changed because of the rise of the COVID-19 delta variant strain. The company is now assuming that COVID-19 mortality will improve, but only slightly, in the third and fourth quarters.

"What we are watching now is that the delta variant is impacting a younger, unvaccinated population that has different dynamics from what we have seen to date from COVID-19," McKenney said. "There is room for optimism, though, as we have started to see employers looking at the role that they might play in getting more of the population vaccinated."

Steve Zabel, Unum's chief financial officer, said Unum originally assumed that about 1% of the Americans who died from COVID-19 would have Unum life insurance.

Now, because the people dying from COVID-19 are younger and more likely to have life insurance, Zabel is thinking that the number of pandemic-related life insurance claims it receives will be about 1.5% of the total number of U.S. deaths, and that is one of the factors dampening the company's earnings expectations for the second half of the year.

Disability Insurance

U.S. insurers' disability insurance claims have looked fairly stable during the pandemic, possibly because a decrease in claims resulting from causes other than COVID-19 has offset any influx of claims from "COVID long haulers."

But Zabel said that leave and short-term disability claim volumes have been elevated because of the delta variant, and that this is another factor leading to a slight dampening of Unum's earnings expectations for the second half of the year.

"We do think that the group disability loss ratio is going to stay elevated, about where it is right now, for the remainder of the year," he said.

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