Covid-19 losses may be waning as mortality shifts to uninsured, P&C has all-clear, says Swiss Re

Covid-19 could be fading as a source of insurance losses at  Swiss Re as mortality shifts into non-insured populations and the direct effects of the pandemic evaporate from property and casualty (P&C), Swiss Re chief financial officer John Dacey (pictured) told an investor call.

Third quarter infections are “still a lot, so we expect this to still be a cost in the fourth quarter for us,” he said, but the latest infection peak is nonetheless “falling dramatically” while rendering the highest mortality rates in a “slightly different population.”

The unvaccinated are an overlap with the uninsured, a fact which early data suggests could cut the correlation between Swiss Re’s expected losses and the pandemic trends.

Swiss Re went from expecting $200 million per 100k deaths in the US to a fresh updated estimate of $150 million, plus or minus $25 mln given how it remains “a little difficult to judge” based on only one or more quarters of data.

Covid-19 losses should dwindle in Q4 from the $170 million seen in the third quarter. “At least to date in Q4 would bear a smaller number, but that’s to be seen as the pandemic continues,” Dacey said.

“We won’t be surprised to see some lingering mortality claims in early 2022, particularly in the US,” he said, while other geographies aren’t likely to bear “material” losses. “But we have to judge this as the pandemic continues its path.

On the P&C side of the business, losses “have become very small” at about $50 million in Q3, largely on event cancellations. “And, in Q4 we have no evidence there will be any changes coming through in the P&C business.”

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