High levels of Covid-19 deaths hurt fourth-quarter results in MetLife Inc.’s business of providing employer-sponsored life insurance as the Delta variant persisted in the U.S., but the outsize payouts were more than offset by unusually strong investment gains.
The New York company’s net income soared to $1.18 billion, compared with a year-earlier period that had been hurt by mark-to-market losses on financial hedges that aim to protect against falling interest rates. MetLife’s adjusted earnings, which analysts track as a measure of recurring profitability, were flat at $1.84 billion.
Another household-name insurer, Allstate Corp., reported a 70% drop in net income to $790 million, and a 50% decline in adjusted net income to $796 million, primarily driven by worsened car-insurance underwriting income. Accident volume increased on more-crowded roads, and inflation pushed repair costs higher.
Catastrophe costs were also higher. U.S. property insurers ended the year with two high-profile catastrophes: deadly tornadoes in and around Kentucky, and devastating wildfire between Denver and Boulder, Colo.
Life insurers had hoped that vaccination campaigns, social distancing efforts and the effects of past COVID-19 infections on people’s immune systems would start to reduce the impact of the pandemic on people with commercial life insurance and other commercial insurance products.
While the fall 2021 surge was underway, information about deaths and life insurance claims emerged slowly. Some life insurers suggested that the fall surge seemed to be spiking hard but ending quickly.
Now, Unum Group, Lincoln Financial, MetLife and other life insurers are saying that the fall surge did cause big increases in the ratio of death benefits to life insurance premiums. At Unum, for example, the ratio increased to 98.3% in the latest quarter, from 71.7% in the fourth quarter of 2019, before the pandemic began.
Democratic lawmakers have called on U.S. insurers including American International Group Inc., Berkshire Hathaway, Chubb Ltd., Liberty Mutual Insurance Co., MetLife Inc. and Travelers Cos. Inc. to explain how their fossil fuel underwriting policies align with their commitments to sustainability.
In a letter dated March 24, Sen. Sheldon Whitehouse, D-Rhode Island, and Senators Jeffrey A. Merkley, D-Oregon, Elizabeth Warren, D-Massachusetts, and Chris Van Hollen, D-Maryland, request information on each insurer’s fossil fuel underwriting and investment policies.
“An increasing number of your competitors have stopped underwriting coal and other fossil fuel projects and/or restricted their investments in coal and certain dirty and environmentally damaging oil and gas projects such as tar sands,” the letter said.
Analysts at the Brookings Institution have predicted, based on consumer surveys and demographic data for the period following the 1918 influenza pandemic, that the number of U.S. births could fall by about 300,000 to 500,000 this year, because of health concerns and the effects of the pandemic on the economy.
MetLife has an indication that the Brookings analysts are correct: Enrollees in the group short-term disability plans MetLife runs for employers are filing fewer pregnancy-related STD claims.
MetLife sells employers group STD coverage, and it also administers group STD plans for employers that choose to self-insure.
STD claims for pregnancy-related leave fell 20% between the fourth quarter of 2019 and the fourth quarter of 2020, according to Phil Bruen, a senior vice president for group life and disability product management at MetLife.