Life Insurance Underwriting

Mortality Trends Raise Underwriting Questions For Life Insurers

The devil is in the data, as insurers ponder lower life expectancy, underwriting changes

Excerpts from “Mortality Trends Raise Underwriting Questions for Life Insurers” written by Terrence Dopp, examines how deaths caused by the pandemic, and its lasting effects, could bring about future changes in underwriting practices. Reprinted with permission from AM Best. View full article here.

For the United States as a whole, and life insurers in particular, 2021 was a year marked by higher mortality as the COVID-19 pandemic entered a third year. The Centers for Disease Control and Prevention reported deaths up across many categories, higher even than 2020.

Last year proved historically deadly in the United States, as excess mortality continued to climb at the same time many hoped to catch a glimpse of the COVID-19 pandemic’s end stages.

The mortality numbers also beg a question that can prove murky at best, especially for the data-driven world of life insurers, one in which quantification is a science of sorts. The open-ended question is whether in a year dominated by the COVID-19 pandemic and the quest to avoid infections, the official counts are in fact off to some degree, leaving unclear the potential true death count wrought by the illness.

Key Points

Deaths: The CDC reported more than 3.42 million deaths from all causes in 2021, up from 3.39 in the prior year and far off the 2.85 million in pre-pandemic 2019.

Causes: While excess mortality tends to rise with COVID-19 numbers, insurers see some level of disconnect and are scratching their heads over whether the excess mortality reflects an undercount of virus-related deaths.

Underwriting: The increase, which was substantial enough to lower life expectancy in the United States, could bring about future changes in underwriting practices. However, it remains too early to tell what the lasting impacts will be.


The latest numbers continued a trend that really took hold in the third quarter of 2021, when life insurers began noting increased mortality in their group life segments as COVID-19 deaths crept down from seniors into the working-age population. A key point to note is that while deaths are up, from an earnings standpoint, the industry hasn’t cratered and gains in other lines have offset the negative impacts of any increased claims activity tied to the disease.

The industry isn't really set up to determine the primary cause of death at the point where it is collected. They don't control that data...

“The industry isn’t really set up to determine the primary cause of death at the point where it is collected. They don’t control that data,” said AM Best Senior Director Michael Porcelli. “COVID deaths often involve other comorbidities so there’s a lot of other factors around what the actual cause of death is.”

Ebb & Flow

After a brief dip to the seventh-leading cause of death in the United States during the summer of 2021, COVID-19 crept back up to second place by January, according to the Kaiser Family Foundation. Since the onset of the pandemic in March 2020, it has remained somewhere in the top three of all rankings.

In fact, during December the virus was the leading cause of death in U.S. adults aged 45-54 and was in the top seven spots for all age groups with the exception of children 4 and under.

Still, the latest data on mortality isn’t good news for the industry or society.

The Society of Actuaries said through 2020 the overall age-adjusted mortality rate for all causes was 16.8%, which marked the highest increase dating to 1900. For comparison, during the 1918 Spanish influenza pandemic, population mortality in the United States increased 11.7%.

About 12% of the group life claims filed during the pandemic period involved COVID-19, and group life claim incidence rates were up 17.6% on a seasonally adjusted basis compared to 2017-2019 rates, the SOA found.

“Excess mortality has down-shifted toward the younger and middle adult ages during 2021, which has a higher intersection with group life mortality,” the SOA said in an email. “Group life mortality was lower in the start of the pandemic, and it now has higher excess mortality.”

Porcelli said the companies he speaks with are keenly watching their mortality statistics. He commonly hears questions over how much of the increase can be solely attributable to the virus and what level of danger that poses from a business perspective. “However, the industry went into this crisis pretty well capitalized and is coming out of it even better capitalized, including a lot of new capital coming in,” he said.