The Covid pandemic is likely to increase the cost of group income protection policies for employers due to rising cases of mental ill-health and potential problems with long covid.
This was the view of Chris Reynolds, chair of the health and care board at the Institute and Faculty of Actuaries. Talking at the Corporate Adviser Workplace Protection and Wellbeing digital conference he outlined research to date on the impact Covid is likely to have on mortality, critical illness and disability claims figures going forward.
Reynolds said that the full impact was unclear at this point but the data to date suggested that there was likely to be a change in the pricing of income protection. He added that it was difficult to suggest the magnitude of this change.
Reynolds added that the ongoing economic uncertainty as well as the health crisis was likely to fuel mental health problems which could lead to extended periods out of the workplace.
Reynolds added that it was unclear what the impact might be on the pricing of critical illness policies. Although Covid does not have a direct impact on claims, delays to screening for cancer and heart conditions could see a rise in claim in future. He said: “Potentially there could be no change, but much will depend on how long screening delays persist for.”
Reynolds shared with the delegates the latest actuarial calculations on how Covid has affected mortality figures. While it is clear Covid has had a devastating impact on mortality and excess death figures this year, Reynolds said that mortality figures may be lighter next year, due to the acceleration of deaths to 2020, better treatment of C-19 symptoms going forward and the vaccination programmes that are now starting to be rolled out.
However this more optimistic outlook on mortality was tempered by a few sobering points for the audience. Reynolds pointed out that: “This is a marathon not a sprint. We are only at the beginning of the end.” Covid potentially could leave a long and painful legacy which will affect many sectors, including the life and health insurance industries, he said.
He also warned delegates that they should be aware of what may be the next potential Covid crisis. This could include potential mutations in the virus he says. Other potential threats on the horizon include obesity and climate changes, both of which could have profound effects on the claims experience and pricing of many group risk products.
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