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Did COVID-19 Change Life Insurance Offerings?

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  • Timothy F. Harris
  • Aaron Yelowitz
  • Charles J. Courtemanche
Abstract
The profitability of life insurance offerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created significant uncertainty, with dire mortality predictions from early forecasts resulting in widespread government intervention and greater individual precaution that reduced the projected death toll. We analyze how life insurance companies changed pricing and offerings in response to COVID-19 using monthly data on term life insurance policies from Compulife. We estimate event-study models that exploit well-established variation in the COVID-19 mortality rate based on age and underlying health status. Despite the increase in mortality risk and significant uncertainty, we find limited evidence that life insurance companies increased premiums or decreased policy offerings due to COVID-19.

Suggested Citation

  • Timothy F. Harris & Aaron Yelowitz & Charles J. Courtemanche, 2020. "Did COVID-19 Change Life Insurance Offerings?," NBER Working Papers 28172, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28172
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    Cited by:

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    2. Richard Yeaw Chong Seow, 2023. "Entrepreneurship Success: A Case Study of Eric Chua’s “TASK†Innovation in Training," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(7), pages 582-593, July.
    3. Dwi Widianto & Muhtosim Arief & Mohammad Hamsal & Elidjen Elidjen, 2024. "Actuarial Risk Management Practices and Firm Performance: The Mediating Role of E-Service Innovation," JRFM, MDPI, vol. 17(5), pages 1-15, May.
    4. Maria Carannante & Valeria D’Amato & Paola Fersini & Salvatore Forte & Giuseppe Melisi, 2022. "Disruption of Life Insurance Profitability in the Aftermath of the COVID-19 Pandemic," Risks, MDPI, vol. 10(2), pages 1-16, February.
    5. You-Shyang Chen & Chien-Ku Lin & Yu-Sheng Lin & Su-Fen Chen & Huei-Hua Tsao, 2022. "Identification of Potential Valid Clients for a Sustainable Insurance Policy Using an Advanced Mixed Classification Model," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    6. Yulia Hristova, 2022. "Life Insurance Penetration Drivers in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 98-119.

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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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