Life Insurance Industry: The Financial Impact of The COVID19 Pandemic

Abstract

The economic and commercial changes due to COVID-19 are affecting life insurance businesses financially. Rates and stocks declined, credit spreads widened, and implied volatilities climbed. These oscillations affect fixed income, stocks, life, and annuity investments, generating balance sheet and earnings volatility. Companies face CECL, IFRS 17, PBR, and long-term targeted improvements (LDTI). Insurers are examining next year's hedge strategy and cash flow estimates. Reduced sales and unpredictable policyholder behavior can hamper investing. Treasury must provide more cash flow to affect actuarial and finance calculations. Rising capital pressure will increase actuarial balance volatility.