Globe Life says it's seeing what federal government COVID-19 trackers are seeing: The pandemic is hitting the kinds of working-age people who are likely to have life insurance harder.
Globe Life — a life insurer that focuses on serving middle-income Americans — said Wednesday that the surge caused an unexpected increase in life insurance claim costs in the third quarter.
The McKinney, Texas-based life and health insurer recorded a profit in the third quarter: It reported $189 million in net income for the quarter on $1.3 billion in revenue, compared with $189 million in net income on $1.2 billion in revenue for the year-earlier quarter.
But the flow of life insurance claims attributed to COVID-19 increased to $33 million in the latest quarter. That figure was down from $38 million in the first quarter of the year, but it was up from $11 million in the second quarter.
The delta variant version of the virus that causes COVID-19 led to higher infection rates and death totals than Globe Life had expected, the company said.
"Compared to prior periods, the COVID deaths were concentrated in geographies and younger age groups where the company has greater risk exposure," Globe Life said.
A New Life Claim Estimation Formula
In recent quarters, Globe Life executives estimated that the company would incur about $2 million in extra life insurance claims per 10,000 U.S. COVID-19 deaths.
The actual ratio in the third quarter was about $3.5 million in life claims per 10,000 U.S. pandemic-related deaths, the company said.
