Is life insurance a human capital derivatives business?

Link: https://math.illinoisstate.edu/Krzysio/KO-JII-Invited.pdf

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Abstract:

Life and disability insurance, as well as annuities, traditionally have been analyzed as products providing protection against random losses. This article proposed that these products can be viewed as derivative instruments created to address the uncertainties and inadequacies of an individual’s human capital, if human capital is viewed as a financial instrument. In short, life insurance (including disability insurance and annuities) is the business of human capital securitization.

Author(s): Krzysztof M. Ostaszewski, PhD, MAAA, FSA, CFA

Publication Date: 2003 — vol 26, pp. 1-14

Publication Site: Journal of Insurance Issues

First COVID-19 Wave Hit Preferred Insureds Hard: Work Group

Link: https://www.thinkadvisor.com/2021/03/12/first-covid-19-wave-hit-preferred-insureds-hard-work-group/

Excerpt:

The team found that deaths attributed to COVID-19 accounted for 5.1% of the individual life insurance death claims participating insurers received in the first half of 2020.

About 2% of all of claims for all causes were for people younger than 45. That was about the same percentage as in 2019.

About 1% of the COVID-19-related claims submitted in the first half of 2020 were for people under 45.

The overall increase in the odds of dying from any cause was highest for insureds in their 70s.

Author(s): Allison Bell

Publication Date: 12 March 2021

Publication Site: Think Advisor

U.S. Individual Life COVID-19 Mortality Claims Analysis

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Excerpt:

The first quarter of 2020 all-cause individual life death counts were in the range of 93% to 99% for
the first quarter in the previous five years, similar to the CDC’s estimated actual to expected all-cause deaths for the population.

The second quarter of 2020 all-cause individual life death counts were in the range of 110% to
113% for the second quarter in the previous five years. This was lower than the CDC’s second-quarter estimate of 118% to 123% for the population.

The average attained age at death of the individual life COVID claims is 0.6 years older than the
average age of non-COVID claims. The U.S. population had a much larger difference of 3.0 years
between the average attained age of COVID and non-COVID deaths.

Author(s): Individual Life COVID-19 Project Work Group

Publication Date: March 2021

Publication Site: Society of Actuaries