Life - Articles - Pandemic to have low impact on future mortality improvements

Insurers and reinsurers currently believe that, on average, the impact of Covid on future mortality improvements will affect life expectancy by less than 1%. That’s according to the latest survey from the Continuous Mortality Investigation (CMI). The CMI’s annual benchmarking survey looks at how insurers and reinsurers use the CMI Mortality Projections Model to make projections of future mortality.

 We know how the pandemic has affected mortality rates during 2020 and 2021, but the effect on future rates is less clear. Respondents were asked to give a best estimate view of the pandemic’s impact on future mortality improvements. Over half of respondents indicated no change in life expectancy at age 65 at the end of 2022, with the remaining respondents indicating falls of either 0.5% or 1%. No respondents indicated a rise in life expectancy.

 Those responding indicated that they were comfortable with the CMI’s approach of placing no weight on the data for 2020 or 2021 in the core CMI Model. The CMI encourages users of the CMI Model to make appropriate adjustments to the core assumptions to reflect the purpose that it is being used for. However, no respondents placed any weight on the data for 2020 and only one expects to place any weight on the data for 2021.

 Cobus Daneel, Chair of the CMI Mortality Projections Committee, said: “Although it is early days in terms of understanding the full impact of the pandemic, this survey has given us an opportunity to see how insurers and reinsurers view its effect on future mortality improvements. As the situation is still evolving, we will continue to monitor this through our annual survey to see if views change.

 “We are encouraged by the widespread adoption of the latest versions of the CMI Model, and that the core version of the Model aligns closely with industry views.”

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