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Comment by wiredfool | Hacker News Reader

Insurance covers insurable events, some of them may be triggered by a pandemic, and some of those might be excluded. Check your fine print.

* Life insurance is probably going to take a hit. My life insurance doesn't mention pandemic or acts of god. Suicide yes. Pandemic no.

* Auto insurance is probably going to be marginally more profitable as miles driven drop.

* Home/Property isn't likely to be heavily affected.

* Health insurance is going to take a major hit. Probably in the bailout/re-capitalization range.

* Reinsurance is going to be dependent on the specific underwriting that's been done.

* Travel insurance. Ha. This is an extinction level event for them, so it's excluded.

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Health insurance is probably going to be fine, because there will be lots of government money flowing into healthcare to drop prices (free tests etc). And total hospital bed capacity hasn't majorly increased (as in: nowhere near 2x), so the total cost they can incur per month isn't significantly higher. May even be slightly lower per patient because most complex treatments have been put on-hold.

Life insurance may also be profiting depending on the structure of the portfolio. Differs a bit per market but some common products pay a monthly amount from let's say 65 until death. A virus might decrease life expectancy of that group from 81 to 77 or something, a 25% drop in required payouts. On the other hand they're often heavily invested in the financial markets which took a big hit. So could go both ways.

You might have noticed ICUs are swamped and nurses are working around the clock? Hospitals do charge for that.

Health insurance will be fine. There was a study (no citation handy) that looked at severe flu seasons, and their impact on health insurers. Barely a blip.

Remember, ~80% of people have minimal symptoms after being infected with SARS-CoV-2.

You can therefore absorb a lot of care for 20%, assuming most people are insured...

This is going to be 20 times worse than the worst flu seasons.

I don't see how that can be the case.

Here's the data from DC on the Flu https://www.cdc.gov/flu/about/burden/past-seasons.html

Over the past decade a low season of 140,000 hospitalizations to a high of 810,000. For this to be 20x worse you'd need each stay from the flu to be 1 day and each for COVID-19 to be 20, and then we'd need to reach somewhere between 700,000 - 4,000,000 positive COVID-19 cases in the U.S. under the current testing methods which leads to approximately a 20% hospitalization rate.

On the death calculation COVID-19 would need to kill 240,000 to 1.2M for a 20x outcome. This is more possible if you go to the low end and we limited mitigation efforts (which we aren't).

Flu, like automobile accidents, are a massive impact on society though because they are now a normal occurrence do not get the media coverage.

> Flu, like automobile accidents, are a massive impact on society though because they are now a normal occurrence do not get the media coverage.

The flu gets a lot less coverage, because it mostly kills people who were going to die anyway. This is not true of automobile accidents, and they are correspondingly viewed as much worse.

There was a brief look at this on EconLog: https://www.econlib.org/who-are-all-the-people-dying-of-flu/

> Thus, Americans 85+ experience almost over 40% of all combined flu/pneumonia mortality, while Americans under 45 years old endure less than 2%. The main reason we rarely hear about flu deaths is that when people die of flu, folks at the funeral probably call “old age” the cause of death. Logically, this isn’t even wrong, because there’s joint causation; if the deceased weren’t old, they almost certainly wouldn’t have died of flu. And philosophically, you can accurately say that most people who die of flu would soon have died of something else.

We had 500 deaths yesterday. We’re doubling ever 2-3 days. I’ll take 3 days.

At the end of next week, we’ll have 2000 deaths a day. At the end of two weeks, we’ll have almost 10,000. We’ll have 200k dead in roughly three weeks.

https://www.xkcd.com/605/

Posting this update half way through the 3-week period. We are now at 16,510 deaths total(1) on April 9th.

I'm not suggesting COVID-19 isn't bad, it just isn't 20x flu bad with the mitigation we have in place.

We won't really understand the statistics on this until a year or more out when analysis of all the death certificates come in and we can look at how 2020 is different, i.e. for each COVID-19 how many fewer flu deaths did we have? etc.

(1) https://www.worldometers.info/coronavirus/country/us/

Well according to Cuomo’s March 26 briefing the ventilator situation maybe nearly that bad. https://www.bloomberg.com/news/articles/2020-03-26/n-y-death... 3-4 days for non-covid versus 11-21 days for covid.

Yeah, it's certainly more prolonged though even the extreme on that range is a 7x delta.

This would lead needing 2 million to 12 million positive COVID-19 tests with 20% hospitalization rate to get a 20x outcome versus our flu seasons.

Health insurance in the US are expecting to have a bumper year this year because all of the elective operations have been cancelled.

They have raised their expectations for next year because the pandemic gives them an excuse to increase prices and as we know every medical procedure represents profit to them and the pandemic will lead to a glut of said procedures next year.

> My life insurance doesn't mention pandemic or acts of god. Suicide yes. Pandemic no.

I'd be pretty surprised if this wasn't true. Who's taking out life insurance exclusively for predictable causes of death? You don't insure those, you avoid them.

"Acts of god" are most of the reason you'd want life insurance in the first place.

Exclusively? No. But I think suicide is covered on some policies after a waiting period.

Usually a year. Just checked my policy from pacific life, it has a 1 year cliff (hah) for suicide.

I don't think life insurance will take a hit. The large majority of deaths we're seeing are among the very ill, ie folks who already had a high short term chance of dying. Within a couple years the insurers would have paid out all that money anyway. And correct me if I'm wrong but most of the time you'd only have life insurance if you have dependents to look after, ie when you're 40 and not when you're 80. The cost of life insurance for an 80yo with 3 illnesses must be prohibitive.

Correct. In fact based on demographic data locally (Canada), deaths from motor incidents have come down enough to offset Corona deaths. Ergo, it's cheaper to have a pandemic.

I don't understand. If they cover dying from flu why does it matter if it's pandemic or not?

I'm thinking business continuity insurance would be a big hit if they have a lot of that on their reinsurance side.

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