AM Best has released a report on the state of the life reinsurance sector including the impact of covid on the industry. 

The credit rating agency says the pandemic impact has been less pronounced than initially expected but points out covid has resulted in elevated mortality in certain demographics. 

“Life reinsurers have noted an uptick in deaths related to liver disease, drug use, and diabetes,” AM Best report says. 

“Whether the pandemic will cause a permanent shift in mortality or mortality will revert to pre-covid levels remains to be seen.” 

AM Best says there has been some movement in adjusting mortality pricing and assumptions, with European insurers often reacting more quickly than other parts of the world. 

Mortality losses were most heavily concentrated in the US, which impacted the earnings of the five largest European and US-based reinsurers, the report says. 

And while mortality rates have been higher, AM Best says the levels have so far been manageable for reinsurers. 

“The global life/annuity reinsurance segment continues to face challenges in 2023, but the industry remains well capitalised and positioned for robust growth,” the report says. 

“Elevated mortality claims have levelled off and are manageable, but pinpointing direct causes and determining future direction has been difficult.” 

The report says reinsurers continue to evaluate underwriting practices, including premium rate increases, to mitigate the impact of higher claims. 

Reinsurers are also monitoring emerging trends such as artificial intelligence and digitisation, to see what role they will play in the future.