Moody's Report Models US Life Insurers COVID-19 Death Claims Ranging from $8B to $160B

In a recent report, Moody’s indicated its modelling estimates that gross life insurance death benefit claims in the US from COVID-19 can be as low as $8B, $40B in a high case model and up to $160B in an extreme model. The wide range reflects the best and worst case scenarios considered by Moody’s. Moody’s also indicated that the actual gross amount can be lower than the $8B best case it modeled and that in 2019 the industry reported $76B of death benefits.

The highest exposure to the death benefit claims is with life re-insurers while insurers that are direct writers may experience less exposure. In addition, the death claim exposure may vary by product line and age of the insured. The elevated death benefits are likely to result in a decline in capital across the industry and among individual companies.

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