Swiss Re has warned the life and health insurance sectors to be prepared for significant and unexpected long-term effects from the Covid-19 pandemic.
The reinsurer highlighted three key underlying effects which it believes are likely to impact the industry over the next three years, most notably that life expectancy and mortality could unexpectedly shorten significantly for the most at-risk people.
It also warned there could be higher disability and critical illness claims, and that as a result of more severe morbidity and comorbidity there will be higher health expense and workers compensation claims.
Most vulnerable hardest hit
The predictions came from its annual Systematic Observation of Notions Associated with Risk (SONAR) report which examines global trends that are likely to hit the insurance market.
Swiss Re highlighted there were unknowns around the potential long-term severity of Covid-19 infection, but warned those most likely to suffer the greatest were those already most disadvantaged or vulnerable.
“Long-term effects [of the pandemic] such as reduced life expectancy, particularly for at-risk population groups, is a very real possibility,” the report said.
“Such effects may correlate with physiological characteristics like age or sex, but they may also correspond with economic and social status. Data from the US suggests a higher incidence of Covid-19 infection among lower-income groups.
“The reasons offered range from more crowded living spaces and, in the case of essential workers, a necessity for physical workplace attendance. The virus may also hit lower-income groups harder, for instance due to less access to healthcare.
“This would further exacerbate income and health-status inequalities, with associated implications for trends in insurance demand,” it added.
Undetected conditions rising
The reinsurer also acknowledged the pandemic had resulted in a wide range of impacts outside of those people directly and immediately suffering from the disease.
“During the pandemic, across countries routine screenings, planned surgeries and treatments have often been postponed in order to prevent health services from collapsing,” it said.
“As a result, many patients have not received the care they need at the right point in time. This could lead to a decline in overall health status.”
The report added that at the same time the incidence of mental health disorders such as anxiety and depression have increased along with less healthy lifestyles, such as less physical activity and increased alcohol or drug consumption.
In populations the firm said, among many potential side-effects, this could mean more undetected or late diagnosis of serious conditions such as cancer, which would mean more conditions not being adequately-treated.
It also predicted longer sick leave terms would put pressure on organizations, individuals, families and physical and mental healthcare systems.
Swiss Re group chief risk officer Patrick Raaflaub said: “When Covid-19 emerged in late 2019, few could have predicted the magnitude of its impact.
“Many of the actions taken to mitigate the pandemic have themselves created new risks, from the widening inequality gap to the dangers of restarting under-maintained industrial operations. It is essential that we have the best possible understanding of these emerging risks.
