COVID-19: news bulletin #1

Club Vita’s COVID-19 research

Welcome to the first Club Vita COVID-19 news bulletin

For the last five months or so the COVID-19 pandemic has turned everyday lives upside down. Both work and social gatherings have moved online. Restaurant dining has moved outside. Work attire has moved towards the casual end of business casual. And tragically, many people have died from a disease we hadn’t even heard of this time last year. 

Pension plans and insurers have also experienced some significant challenges with volatile asset prices, administration systems under strain and significant questions emerging for long term demographic and financial projections.

After this major shock to our systems, a return to a healthy economy requires us to rebuild confidence in the way that we should go about our daily lives. We have a vital role to play: Pension plans have unusually useful data and our industry has the expertise to use this data for the good of all. By working together, gaining insights from these data, we can accelerate the rebuilding of confidence and hasten the economic recovery.

In addition to Club Vita’s webinars and written articles on COVID-19, our attention is now turning to our own research. These newsletters will give you an update on our current thinking and progress with this research.

A significant mortality event

COVID-19 is a significant mortality event. Pension promises and insurance contracts will be directly affected and it will be vital for businesses to understand the impact – who will survive, what are their characteristics, how long will they subsequently live? The following charts show the scale of this event.

The chart on the left shows how the cumulative number of deaths in the US throughout the year compares to the previous five-year average. The chart on the right shows weekly US deaths compared to the five-year average. At the beginning of August, the US saw over 220,000 more deaths than the previous average at this point in the year. In addition, we note many 2020 “excess deaths” have not been recorded as COVID-related, meaning the official COVID statistics being released by the government are not capturing the full impact of the pandemic.

These charts show the situation for the whole of the US, but the pandemic has been experienced very differently across the country. We explore these differences in more detail in our recent article.

Source: Weekly Counts of Deaths by State published on August 19, 2020 by the Center of Disease Control and Prevention (CDC).

Zip codes hold the key

At Club Vita, we’ve demonstrated that ZIP codes hold the key to capturing the diversity of expected lifetimes and we’re learning that they are predictive of COVID outcomes too… 

COVID-19 has not only been felt differently across the US, it has been felt differently across socio-economic groups within areas of the US (an effect we wrote about back in April). To understand the effects of COVID-19 on pension plans, it will therefore be necessary to understand where participants live, both on a macro and micro level. ZIP+4 data will allow us to understand many of the drivers for increased mortality due to COVID-19, such as population density, housing quality, access to affordable healthcare and more.

Access our US longevity map here.

Advisory Research Panel

To answer the question of how COVID-19 has affected different groups across the US; and to restore certainty to the financial models used by our clients and the broader pension community Club Vita has assembled a team of industry experts to direct our research and achieve our key outcomes of enabling pension plans and insurers to manage uncertainty and secure pension promises for all.

How can you get involved?

We are working to combine records from a diverse collection of workplace pension plans. The momentum we’ve created behind our outreach will lead to powerful results. If you are a plan sponsor and you’d like to contribute data, gain access to early insights from our research tailored to your plan, or sit on our panel, please get in touch.

You can join the discussion with your peers in the Friends of Club Vita group on LinkedIn, where our experts regularly post relevant articles. 

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