7 Rich Countries Where COVID-19 Is Hitting Much Harder

Just a few months ago, the rich countries of the world thought vaccination campaigns would help them banish COVID-19 to the pandemic memory attic, along with polio and smallpox. But, for life insurers, the third quarter proved to be the worst for insured COVID-19 mortality losses ever. The COVID-19 delta variant caused a short, severe surge that swept over the world, killing many people under 65 who had not been vaccinated, and some people under 65 who had been vaccinated. Executives from U.S. insurers have said during recent conference calls with securities analysts that the summer surge hit hard in August and September then quickly eased. Now, however, figures gathered by the World Health Organization show that the 38 countries that belong to the Organisation for Economic Co-operation and Development — an organization for rich countries — are starting to experience a new surge. The typical OECD member country reported a 10.8% increase in the number of newly diagnosed COVID-19 cases between the seven-day period ending Nov. 1 and the seven-day period ending Nov. 8. The typical OECD country reported a 6.5% increase in the number of deaths. News reports from Europe confirm that the surge is filling hospital intensive care units in many countries, and leading countries like Belgium and the Netherlands to bring back tougher mask-wearing rules. The latest case and death figures may understate the size of the new surge, because those numbers likely reflect the effects of data reporting delays.

What It Means

COVID-19 surges are typically a neutral factor for U.S. major medical insurance providers: They lead to increases in COVID-19 care costs but keep people from getting ordinary medical care. The surges can hurt life insurance issuers by killing people with life insurance directly and by keeping insured people from getting care that could save them from dying from ordinary health problems, such as strokes and heart attacks. In theory, surges can help issuers of long-term care insurance and annuities, and sponsors of pension plans, by killing some of the people getting benefits. In the real world, COVID-19 has helped U.S. issuers of long-term care insurance, at least temporarily. The pandemic has not done much to cut individual annuity obligations, because typical individual annuities provide death benefits. The pandemic helped insurers that provide longevity protection for pension plans early on, but it did less to cut longevity protection obligations in the third quarter, because the COVID-19 death rate in two markets where longevity protection for pension plans is popular, the United Kingdom and the Netherlands, was low, according to Paul Mahon, the CEO of Great-West Lifeco. Executives from MetLife and Reinsurance Group of America have said during their companies' earnings calls that their companies are increasing mortality protection prices because of the effects of the pandemic. Arshil Jamal, an executive who runs Great-West's reinsurance business, said that company is monitoring COVID-19 data in all markets closely. "We're taking pricing action where it makes sense for us, and being very cautious in underwriting new traditional mortality business in the U.S. in this environment," Jamal said.

Details

For a look at data for all OECD countries, see the chart below. For the countries with the biggest percentage increases in the number of new cases over the past week, see the slideshow above.

COVID-19 Trends in 38 OECD Countries