New mortality data to help insurers

Wednesday 28th October 2020 Penny Pryor

Jennifer Lang Mortality rates have been significantly lower than predicted during June, and lower than normally recorded, according to an analysis of the Australian Bureau of Statistics (ABS) Provisional Mortality Statistics by the Actuaries Institute.

“We expected the deaths to be lower than previous years but we were actually surprised by how low they were,” Jennifer Lang, convenor of the Actuaries Institute’s COVID-19 Working Group said.

Deaths in June were around 400 lower than the likely range for a normal 2020.

“It was a good and surprising outcome,” Lang said.

A tool for insurers

In June, the ABS started releasing monthly provisional mortality statistics collected from doctor-certified deaths (excluding coroner-referred deaths) to help measure the impact of COVID-19.

Not only is COVID mortality low, but also since mid-April and up until the end of June, and before Victoria’s second wave really hit, there was only one doctor-certified influenza death.

The monthly data is informative and while it may not impact pricing in the insurance industry it can still be useful.

“The insurance industry normally prices based on long-term information …its probably not going to change short-term pricing,” Lang says.

“I think one of the interesting things is probably there is seasonal information now available that wasn’t available before.”

And this gives insurers scope to make sure they are ready to give good customer service at the right times.

Wider coverage

Insurers have their own data sets to examine too of course but the difference between the new information and what insurers are looking at on a regular basis is that the new ABS information now covers the whole population.

Insurer information covers a mainly younger to middle-aged cohort - those that have a greater need for life insurance.

“Most people beyond retirement age do not have the need for life insurance,” Lang says.

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