Despite more than 2.8 million coronavirus pandemic-related deaths globally so far, the world’s five largest life and health (L&H) reinsurers – Hannover Rueck SE, Munich Reinsurance Company, Reinsurance Group of America, Incorporated, SCOR SE and Swiss Reinsurance Company Ltd – have only been moderately affected by heightened mortality losses and remained profitable in 2020. Fitch Ratings expects pandemic-related mortality claims to decline in 2021 due to the global rollout of vaccines. This assumes that virus variants will not diminish the effectiveness of the vaccines. L&H Reinsurers Remained Profitable in 2020The five largest L&H reinsurers reported declines in net earnings in 2020 from 2019 due to pandemic-related mortality claims. However, they remained profitable despite the high number of deaths globally.The key reason for this is the very low penetration rate of mortality covers amongst the older age cohorts globally, with very few exceptions such as the US, Canada or the UK. People aged 75 or higher have been most affected by the pandemic.Mortality Claims Will Decline in 2021Fitch believes that the global rollout of vaccines will prove successful, leading to a lower number of deaths linked to the pandemic in 2021 and 2022, and bases its credit analysis on this assumption. Virus variants pose the largest risk to this scenario as they may render vaccines less powerful or even useless.
Publication Date: 19 April 2021
Publication Site: Fitch Ratings