Canadian insurers paid out $154.2-million in individual and group life insurance claims from deaths related to COVID-19 in 2020.
A report released this week by the Canadian Institute of Actuaries said individual life insurance claims increased in almost every month of 2020 compared with the corresponding month in 2019, with insurers paying out $139.05-million for 3,179 individual claims where COVID-19 was identified as the cause of death in 2020.
At the same time, group insurance policies, which are typically provided through employers, paid out $15.17-million for 754 claims owing to COVID-19 deaths.
While the first reported case of COVID-19 in Canada was in early January, 2020, many Canadians were not aware of the symptoms for the virus until mid-March when the World Health Organization declared the virus a pandemic.
The institute’s report said life insurance claims were also higher in the first three months of 2020 than the year prior, which could suggest there were COVID-19 deaths that were not recognized at that time.
“It is conceivable that life insurance claims in the very early months of 2020 were impacted by COVID-19 even though the specific cause of death was not recorded,” the report said.
The report is based on data collected quarterly from 13 insurers, including Canada Life Assurance Co., Manulife Financial Corp., Sun Life Financial Inc. and IA Financial Group, and shows COVID-19 individual claims peaked in April, 2020, with $41.4-million in claims.
The Canadian Institute of Actuaries began to research the impact of COVID-19 on the life insurance industry in April of last year to analyze whether the overall level of life insurance claims was different than in previous years, and whether COVID-19 was a significant cause of life insurance claims in Canada.
The latest report shows December was the second-highest month for individual COVID-19 claims in 2020 as the country entered into a second wave of the virus, causing individual life insurance claims to climb. Claims in December hit $30.8-million, about 75 per cent of the peak April level.
COVID-related claims in December accounted for about 10 per cent of the total individual life insurance claims that month, down slightly from the peak in April of 12.9 per cent, but up significantly from less than 1 per cent of total claims in August.
The institute has not published data yet for claims in early 2021 as the pandemic continued.
“From general population data, we know that the second wave of COVID-19 infections and deaths continued impacting Canada during the early months of 2021, and it will be important to analyze the further impact of this second wave and of subsequent waves of COVID-19 on life insurance claims in 2021,” it said in the report.
Group life insurance claims because of COVID-19 were highest in April, 2020 – where they accounted for 6 per cent of total group claims and paid out more than $4-million.
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