COVID-19 claims cost life reinsurers £3.1bn

The cumulative cost of COVID-19 claims for the largest life reinsurers is thought to have reached £3.1bn in the first quarter of the year as mortality rates spiked, according to figures published today by Bloomberg Intelligence.

The US, UK and Canada accounted for the largest portion, but claims from other countries including South Africa and in Latin America added to the costs. Life reinsurers only have limited exposure in India. The successful rollout of vaccines and a sharp decline in deaths in the US and UK, however, point to profit recovery for Swiss Re, RGA, Munich Re and Hannover Re. Bloomberg Intelligence estimates Swiss Re accounted for around 35% of claims followed by Reinsurance Group of America on 27% but the decline in deaths should mean much lower claims for the second half of the year.

“COVID-19 mortality claims rose sharply in the first quarter after deaths spiked in the US, UK and other countries. New variants of the virus remain a threat yet the success of vaccines give reinsurers hope mortality claims won’t return to first quarter levels,” said senior industry analyst Charles Graham.

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