What’s contributing to excess mortality in APAC, even after the pandemic?

Daisy Ning

Head of L&H Re, APAC ex China at Swiss Re

A lot has happened in the five years since the start of the pandemic. I often find myself reflecting on the worries I had when the news first hit – both on a personal level, but also on a professional level as a member of the life insurance industry. While the WHO declared the end of the pandemic as a global health emergency more than a year ago, we can all point to ways in which COVID-19 continues to make an impact. 

Swiss Re has continued to explore the impact on consumers, the insurance industry and the economy. Our recent research suggests that the impact could remain significant for insurers for years to come, arguing for continued vigilance and readiness to adjust business models in response. Encouragingly, our data also shows that if we establish the right steps and strategies, there’s every reason to be optimistic about the prospects for individuals’ lives and their health across APAC, and our capacity to protect both. 

A lingering challenge 

The future of excess mortality after COVID-19 forecasts the potential trajectories of excess mortality in the coming years, based on several key underlying drivers. These include everything from newer more transmissible and potentially virulent variants and their residual impact, to continued strains on healthcare systems.

The good news: COVID-19 and excess mortality rates overall are much lower than during the height of the pandemic and continue to decline. Australia, for example, saw excess mortality rates peak at around 5% in 2022, before retreating to 0% in 2023, as per official reporting.

Much of the remaining excess mortality is attributed to respiratory deaths, followed closely by higher cardiovascular mortality, a pattern we’ve also observed in Japan. In an optimistic scenario, pandemic-linked excess mortality could recede in the US and UK, disappearing by 2028. Under a more challenging scenario, excess mortality may remain elevated to 2.5% and 3% by 2033 in the UK and US respectively.  

Excess mortality calculations can widely vary, dependent on the baseline of expected deaths – these are a combination of observed mortality over time and considerations of mortality improvement. Many countries continue to report deaths above pre-pandemic numbers, with a degree of underreporting.

Life insurers in APAC should carefully consider how drivers such as the continued impact of COVID-19 and respiratory illnesses, alongside lifestyle changes, may challenge their portfolio assumptions, and adjust exposures as needed. 

Source: Swiss Re Institute

As the life insurance industry manages long-tail mortality exposures, monitoring and measuring excess mortality remains important for understanding population health, and informing pricing and reserving practices. Developing models for scenarios based on current trends can enable insurers to translate forecasts into valuable insights for managing their portfolios effectively. 

If excess mortality prevails at higher levels, insurers may need to revise their expectations for mortality improvements. Shifts in the major causes of death or lifestyle changes post-pandemic could prompt a re-evaluation of underwriting practices and certain lines of business. 

Learning to embrace the positive 

Understanding the possible effects of excess mortality, and adjusting  portfolio and product lines in response, is important. However, we can take a more proactive approach in guiding our region towards better health and protection outcomes. 

First, we can increase our efforts to address the substantial protection gap, particularly among young people. While gross written premiums are on the rise globally, the number of life insurance policies has however stagnated in markets like China and Australia, and we have seen a decline in sales for protection products. We can counter this by ensuring that products are as accessible and affordable as possible – leveraging digital platforms and adopting innovative models such as microinsurance. 

Second, many of the factors driving excess mortality are to some extent linked to lifestyle choices. The insurance industry can create a positive impact by improving or expanding prevention programmes, implementing strategies to incentivise healthier behaviours among policyholders. We’re already making progress by incorporating activity data from wearables into risk assessment and dynamic pricing models.

Finally, let’s acknowledge the positive medical advancements that have emerged. The rise of AI in medicine will likely enhance our ability to predict, model and mitigate health risks. Similarly, advancements in weight loss drugs and mRNA-based treatments for cancer show promising improvements for health. 

Even as we continue to navigate the pandemic’s legacy, there are positive forces that will strengthen the health of APAC populations and enable our industry to remain resilient.  By integrating these changes as we evolve, we can contribute to better life and health outcomes for policyholders and ultimately, to reduced excess mortality.