The U.S. mortality rate is falling, and life insurers can handle it, but it's still noticeably higher than it was in 2019, before COVID-19 came to light.
The excess mortality level continues to be high enough that life insurers and reinsurers think about it when pricing coverage.
"I think we're at about 3% to 4% excess relative to pre-pandemic levels for the first half of this year," Jonathan Porter, the chief risk officer at Reinsurance Group of America, said Aug. 2, during a conference call the Chesterfield, Missouri-based company held to go over second-quarter earnings with securities analysts.
RGA is a reinsurer, or insurance company for insurance companies. It protects life and annuity issuers against catastrophic mortality risk and other forms of risk, such as pension plan and annuity longevity risk.
About 2.8 million people died in the United States in 2019. If the U.S. excess mortality rate stays at 3% to 4% for a full year, that would imply that the country would experience about 84,000 to 112,000 extra deaths.
The chief financial officer at Globe Life talked about the lingering high mortality rate during a conference call the company held in July to go over second-quarter earnings. The Globe Life CFO gave no numbers.
Executives who have talked the most about excess mortality have noted that it's falling, and that it's with the limits they had used in planning. It's no longer hurting life insurers' earnings.
RGA, for example, reported $204 million in net income on $4.9 billion in revenue for the latest quarter, compared with $207 million in net income on $4.2 billion in revenue for the second quarter of 2023.
RGA's adjusted operating income before income taxes, which excludes the effects of fluctuations in the value of its assets and benefits, increased to $491 million, from $736 million.
