AUTHOR=Zhang Xun , Liao Pu , Chen Xiaohua TITLE=The Negative Impact of COVID-19 on Life Insurers JOURNAL=Frontiers in Public Health VOLUME=9 YEAR=2021 URL=https://www.frontiersin.org/journals/public-health/articles/10.3389/fpubh.2021.756977 DOI=10.3389/fpubh.2021.756977 ISSN=2296-2565 ABSTRACT=

Understanding COVID-19 induced mortality risk is significant for life insurers to better analyze their financial sustainability after the outbreak of COVID-19. To capture the mortality effect caused by COVID-19 among all ages, this study proposes a temporary adverse mortality jump model to describe the dynamics of mortality in a post-COVID-19 pandemic world based on the weekly death numbers from 2015 to 2021 in the United States. As a comparative study, the Lee-Carter model is used as the base case to represent the dynamics of mortality without COVID-19. Then we compare the force of mortality, the survival probability and the liability of a life insurer by considering COVID-19 and those without COVID-19. We show that a life insurer's financial sustainability will deteriorate because of the higher mortality rates than expected in the wake of COVID-19. Our results remain unchanged when we also consider the effect of interest rate risk by adopting the Vasicek and CIR models.