SOA on Impact of Covid-19

The Society of Actuaries (SOA) release a research brief on the impact of COVID-19,

Excerpts below:

At the start of a pandemic, mortality rates are crudely estimated using a statistic known as the “case fatality rate” (CFR), which divides the known deaths by the identified number of cases. Using this methodology and the Johns Hopkins University database through April 14, 2020, the COVID-19 CFR across the worldwide set of case information is 6.4%. These raw estimates, however, often are adjusted to produce updated rates, due to the current likelihood of under-reporting of actual cases. Some key health officials in the U.S. expect an ultimate case fatality rate from the disease, once all known cases are included in the calculation, to settle in the 0.1%–1.0% range….Initial CFRs in the U.S. ranged between 3.5% and 4.5%, slightly higher than the worldwide rate, primarily due to the disease initially being seen in higher age groups, per the Centers for Disease Control and Prevention (CDC). As more cases have been identified, the CDC’s estimate of the U.S. CFR has trended downward to the 1.8%–3.4% range. As of April 14, 2020, the U.S. CFR was 4.3%, based on Johns Hopkins University data. Because the pandemic is rapidly evolving, the U.S. CFR is likely overstated because the number of new cases each day has been increasing significantly. (page 9)

Gender differences in CFRs have also been emerging in the available data, and men have fared worse than women.In mainland China as of February 11, 63.8% of the deaths are male. In Spain, as of April 13, 61.6% of the deaths have been male. Other risk factors are also prevalent in those who have died. Of the 8,644 people who died in Spain as of April 1, 80.6% had one or more risk factors such as heart disease, respiratory disease or diabetes. In the U.S., 78% of the intensive care unit (ICU) patients and 71% of the non-ICU hospitalizations have had multiple risk factors. (page 10)

Death rates and reported cases will grow rapidly over the coming weeks. However, the pace will be very different in each community and country. It is important to understand the different timing of different numbers. Deaths are a lagging indicator. Deaths will greatly increase in many communities over the next month—even if the personal and private actions have slowed the growth of the virus. The same is true for reported cases. The numbers of reported cases will greatly increase over the next months. (page 12)

A high exposure percentage would be good news, indicating that a significant portion of the population has already contracted the virus, experiencing either mild or no symptoms. The greater the number of infected individuals who have experienced little or no discomfort as a result of the virus—relative to the number who have experienced severe complications or death—the less danger the virus poses to the population that has not yet been infected…..Additional emerging evidence supports the idea that COVID-19 is much more prevalent than indicated by the number of identified cases in most populations. Thus, the CFR may not be as deadly as originally thought. Data from Iceland, where testing has been more broadly implemented than in other countries, indicates that the prevalence may be around 1%. Using the deaths that have occurred in Iceland and its population age mix, this would extrapolate to a global CFR of about 0.6%. The USS Theodore Roosevelt is another population where there has been widespread testing. As of April 16, 585 of the 4,860 crew had tested positive, resulting in an infection rate of 12%. There has only been one death associated with this Navy ship, although it may be early in the cycle of disease progression. (page 15)

Hospitalization rates for COVID-19 patients appear to be high. Using the CDC’s hospitalization rate of 29.2 per 100,000 population and the CDC’s 690,714 number of cases as of April 18, along with a U.S. population of 330.7 million, the hospitalization rate per COVID-19 cases in the U.S. is 14% and much higher than the hospitalization rate of 1%–2% for influenza patient. (page 19)

Overall health care cost and utilization in many countries will also be impacted by the decisions that individuals make surrounding other typical illnesses that may arise and elective procedures that have been scheduled. Some patients have procedures that may not be able to be deferred indefinitely due to the nature of the illness, such as scheduled chemotherapy treatments. In these cases, hospitals are looking to make sure high-risk patients with compromised immune systems are not exposed to the virus.Some individuals may be nervous about personal contact in a medical office or a hospital setting where the virus may be present. Consequently, individuals may defer some services, and health care providers may see non-urgent ailments less frequently. In addition, health officials have been strongly encouraging patients to carefully consider use of emergency room services and not to use them for minor health issues. (page 28)

Among the concerns to life and health insurers is the potential for the virus to spread quickly among older individuals who are highest at risk and living in close proximity to others, such as in senior care facilities and nursing homes. In U.S. senior care facilities alone, the disease has reportedly caused over 2,000 deaths, with some level of illness in over 14,000 individuals at over 2,000 distinct centers. (page 29)

The question remains on whether a person who has recovered from COVID-19 has immunity from becoming sick again. For now, it appears people who have had the disease are relatively unlikely to get it again, at least within the timeframe of the current outbreak. Researchers will need more time and data as the virus plays out before any definitive conclusions can be made. In addition, secondary health impacts of having coronavirus infection and recovery are beginning to be seen. Early reports on the impact of the disease beyond respiratory illness are being noted, especially in relation to neurological conditions with symptoms such as brain inflammation, hallucinations, seizures, cognitive deficits and loss of smell and taste. Recent studies on recovered Chinese patients have indicated that more than one-third had some form of neurologic symptoms. (page 29)

The sharp market downturns in the current economy will likely hasten the demise of some of the troubled plans. Although some drafts of the bills that became the CARES Act included multiemployer pension plan relief, the law that was enacted did not provide any sort of relief for multiemployer pension plans. On a positive note for multiemployer plans, plan funded status does not affect PBGC premiums for multiemployer plans. (page 46)

While market downturns clearly result in increased unfunded liabilities, the most pressing concern of public pension plans may be the funding of contributions due in 2020. Because of the widespread COVID-19-induced downturn in economic activity, states and local governments are generally expecting significantly reduced revenue during 2020. At the same time, increases in unemployment claims and related human needs call for increased spending, resulting in budget crises. In an effort to give New Jersey an opportunity to rework its budget for the upcoming fiscal year, New Jersey Governor Phil Murphy extended the state’s current fiscal year end from June 30, 2020, to September 30, 2020. Increased contribution needs resulting from increased unfunded liabilities are less pressing concerns for a couple of reasons: actuarial smoothing techniques and timing lags.Most public pension plans employ actuarial smoothing techniques when determining contribution needs, including asset smoothing and amortization approaches. Asset smoothing details vary from plan to plan, but the intent is universal: to spread over time the impact of both positive and negative asset volatility. While most plans will likely have asset losses stemming from recent market downturns, they will spread those losses over time. In addition, many plans have not yet fully recognized asset gains of recent years, which will also help cushion the blow to increased contribution needs. (page 46)

Many large public pension plans are in a financial position to weather the COVID-19 storm battered but intact. A few state-based or large-city may be at greater or more immediate risk, especially plans with both a low funded ratio and a severely negative cash flow. In mid-April, the president of the Illinois state senate asked the federal government for a grant of more than $40 billion, including $10 billion for its troubled state pension plans. Currently, federal bankruptcy code does not allow state governments to declare bankruptcy, although political subdivisions of states are allowed to declare bankruptcy. (page 47)







59 responses to this post.

  1. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 4, 2020 at 8:25 pm

    Even with “stay at home” orders issued in many countries,5 by April 2, the disease had spread to nearly all corners of the world.
    The ONLY reason Covid-19 “spread to nearly all corners of the world ” is because that asshole commie nation China HIDE the virus and then allowed their INFECTED residents to FLY allover the world. If Commie China had come forward on Day #1 and informed the world of Covid-19, and instituted a lock-down, it would have been CONTAINED to just China…. We should Nuke that Commie nation. We are on the verge of the biggest depression this nation has ever seen, ala 1929 pain and misery.

    Oh, wait, I have a pic for TL, Marine-0 and EG … Because Rex puts FAMILY first! 🙂


  2. Posted by Marine1 on May 4, 2020 at 8:46 pm

    Trump may still win re-election, but I think things have recently become much more murky. Pandemic with no vaccine, 26 million out of work,social unrest (see Michigan),meat shortage now. If we apply the “are you better off than 4 years ago” adage I think many will say no. This is America people don’t want to wait in lines to buy food and not be able to buy what they want when they finally get in. Trump better get that shit under control like tomorrow or he’s going to get crushed on election night. The American people demand better than this.


    • Posted by Tough Love on May 4, 2020 at 10:27 pm

      ANYBODY is better than narcissist/pathological-liar Donald Trump.


    • Posted by E on May 4, 2020 at 10:32 pm

      Not only that, but many many conservatives don’t really identify with the “patriots” in MI and in other areas. In fact, it troubles them. The fence sitters may go Biden for the reasons you say. They think the Nazi stuff and nod and wink approval by the president to these protesters will take the country to a place they don’t want to be. Many conservatives by and large were rising high w Trump before this hit. I mean financially, but also socially as well. They were sick of the liberal nonsense that made them feel like white men are the problem. But after watching these crazies march into a state house armed and dressed like Marine1 back in the day…..who knows. We ALL can agree, these folks are NOT patriots.


    • Posted by E on May 5, 2020 at 6:45 am

      Even Hannity (who I used to listen to on WABC while patrolling in the late nineties) has condemned the Michigan folks. He correctly states that they could have concealed carry(something I do very often) if they felt unsafe. This was done specifically to intimidate. What Happens is that the message is lost. And the govt winds up looking more sympathetic to mainstream people. Diluting support for reopening and Trump in general. No different than BLM protests where assholes shout “fuck the police” etc. total dilution of the message due to stupid and dangerous antics.


    • Posted by dentss dunigan on May 5, 2020 at 5:46 pm

      Everybody knows the point of all this. Last year the gangster left determined that Trump’s only strength is the economy, so, since they have nothing positive to offer, they had to go after the economy. Powell said as much in November, the M$M clowns said it in December and all this started the day operation peach mint crached and burned.


  3. Posted by MJ on May 5, 2020 at 7:25 am

    Hi all,
    Some crazy times we are all experiencing. It’s very disturbing to me that the store clerks are expected to “police” the mask policies and intercede when a customer isn’t wearing a mask or trying to purchase more of the limit on certain products, etc. Most all of us are good people and we want to be good neighbors and go along with the program but I have to chuckle to myself when I go to a super market or a Home Depot and you have the clerk in charge of the procedure of who to let in and how many, who is or isn’t wearing a mask, etc.

    As with any situation, I guess we have to expect a few individuals to take it way past the limit such as the MI gun toting protestors or the crazy person who shot the store clerk. Maybe crime is way up since the police are busier dealing with this Covid-19 shit.

    IDK what moderate mainstream people are thinking or if Trump will be re-elected or what will happen tomorrow let alone next month but good God something has to change

    Release the Asian Murder Hornets!


    • Posted by Marine1 on May 5, 2020 at 7:34 am

      MJ- That’s all we need is the Hornet thing to start ramping up. Starting to look like a Bible story.


    • Posted by E on May 5, 2020 at 8:13 am

      Many supermarkets have hired security to enforce that stuff. We saw how that worked in MI. So far, people have been decent in that respect. However, there is no question crime is going up. We have had a rash of car burglaries. (All preventable— people leave five in car and criminals steal them.) And some commercial burglaries. The criminal element knows as first responders LEO is so focused on Covid and what that entails. Depts are at minimum staffing as it is.
      It probably dipped first few weeks of this, but is at least up to the point where it was before. Only problem is less attention being paid to it.

      Daughter screwed outta senior year stuff. Graduation etc. 🤷‍♂️
      I’ll be passing through 609 territory a lot next few years. She going to U Del in the fall (god willing that’s not delayed)
      Wave to me as I pass by exit 4. lol.


      • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 5, 2020 at 3:46 pm

        Daughter screwed outta senior year stuff. Graduation etc. 🤷‍♂️
        I feel terrible about HS seniors. Missing HS Graduation, one of the most import and and pivotal events in a persons life, is not just sad, but traumatic.

        Also feel for all college grads and Grad school grads… Missing out on that walk across the stage after four long hard and punishing years of grueling work, while not as traumatic as missing HS Graduation, is simply tragic…

        To make up for your daughter missing graduation we should all chip in $$ and PAY her to go on a covert, undercover operation at University of Delaware and photocopy all of Sleepy Joe’s dirty laundry hidden in their archives!!!!


        • Posted by Tough Love on May 5, 2020 at 4:30 pm

          Quoting ………. “…after four long hard and punishing years of grueling work”

          Yes, for SOME in the STEM field who are really motivated. Unfortunately most Bachelors degrees require very little effort. America is WAY behind many other countries in the quality/education of their college graduates.


          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 6, 2020 at 1:59 am

            Unfortunately most Bachelors degrees require very little effort.
            I have no idea where/if you went to college, but PUBLIC colleges in CA (CSU and UC) are insanely demanding and they have crushing work loads, and it is not limited to STEM subjects… Oh, and they ALL have a standard Bell Curve for grading with the majority of grades being “C”, then D’s and B;s and last F’s and A’s. Not like an Ivy where they only had out A’sand B’s….

        • Posted by E on May 5, 2020 at 5:21 pm

          There definitely is something that they don’t want us to see.


  4. Posted by MJ on May 5, 2020 at 10:34 am

    Aw E….so sad for your daughter and all of the high school seniors everywhere. They have definitely been cheated out of a huge milestone through no fault of their own. I don’t see why the schools couldn’t have a ceremony over the summer (July) with attendance limited to parents and maybe grandparents all wearing masks if necessary and by then possibly small family gatherings to celebrate if a family so chooses. I think it’s important for the teachers and students to have closure on their high school experiences and relationships. Who knows, maybe it will be an awesome story to share with children and grand children.

    University of DE is an awesome school. I know many who went there and all had positive experiences. I’m sure your daughter will be awesome and I wish her all the best in her endeavors. You will have to keep us updated on the “new normal” of dorm living and campus life. Ugh just can’t wait until all of this is over so that we all get back to some reasonable level of normalcy whatever that will look like.

    Stay safe out there and stay healthy!


    • Posted by E on May 5, 2020 at 11:53 am

      I would love to just have a social distance ceremony late June. Have everyone wear masks and sit 6 ft apart etc. in football bleachers outdoor only w a rain date.
      Only parents and siblings. Call each kid up, no shake hands etc w principal, just have em walk up, say their name, take mask off for a pic w family in tow etc. no one else there etc. then have all the kids put masks on and take class pic. Lol. Something to remember the uniqueness of the year. 🤷‍♂️
      They all bummed but also excited and realize in 7 weeks it would be over anyway. You remember how it was. Senioritis.
      My sophomore is handling well too. Only bummer there may be a delay in getting her permit (late summer bday).
      Really liked the campus at U del.
      let’s hope this gets better over the summer and By sept schools and businesses ALL are up and running. Stadiums and arenas I realize may not yet be.


      • Posted by E on May 5, 2020 at 11:55 am

        And by the way, thanks for the kind words. 👍


        • Posted by PS Drone on May 5, 2020 at 7:07 pm

          Have fun with the tuition etc. I did it six times (which is why I am now broke). Feel bad for you and family. HS graduation is a big deal. Plus parties etc. afterwards.


          • Posted by Marine1 on May 5, 2020 at 8:04 pm

            PS Drone- Six times ? No wonder you’re such a JO ! Lol. Just kidding. Hats off to you man. Your children are lucky.

          • Posted by E on May 5, 2020 at 8:33 pm

            Wow. I have 2. I couldn’t even imagine. I too, tip my cap.

          • Posted by PS Drone on May 5, 2020 at 10:20 pm

            Two marriages. Some of us never learn. Love my kids though. Last one got out of college 2018. Lucky.

      • Posted by Marine1 on May 5, 2020 at 8:01 pm

        E- They did a nice graduation ceremony at the Air Force Academy. Did it on a large field. Watched it on TV , Seats six foot apart,graduates did not go up for diploma (not sure if they usually do or not) , didn’t see any parents. Still was decent though.


      • Posted by Marine1 on May 5, 2020 at 8:15 pm

        E- That would suck,no graduation. I had a blast,was going in the service two weeks later so I was unhinged before I went. My parents were happy I was leaving I think. I sweated a ton of alcohol and cigarettes out my first week of boot camp. Lol


        • Posted by Tough Love on May 5, 2020 at 8:25 pm

          cigarettes ?

          BAD BAD BAD stuff.


          • Posted by Marine1 on May 5, 2020 at 8:31 pm

            TL- I was 17 TL. I smoked when I drank. I agree though,horrible for you. Killed my mother. Two packs a day she smoked. Died in her 50’s.

          • Posted by E on May 5, 2020 at 8:38 pm

            Marine1. I could only imagine. Those were the days. Lol.
            TL— my sister has smoked for over 30 years on and off. Mostly on. Terrible.

          • Posted by Tough Love on May 5, 2020 at 8:48 pm

            I’ve witnessed the HORRIBLE long term effects of smoking. Infuriating that it’s not illegal.

            MANY years ago, when the heads of all the American Tobacco companies stood-up before congress, and 1 by 1 stated that they did not believe cigarette smoking cause cancer, I thought that they deserved an Al Capone-style Valentine’s Day machine gun massacring …….. on the spot.

          • Posted by Marine1 on May 5, 2020 at 8:56 pm

            TL & E- Smoking was banned in boot camp when I went,but my father who was also a Marine in the late 1950’s said that during boot camp if you didn’t smoke you didn’t get a break ! He started smoking in boot camp to get a break.

          • Posted by Tough Love on May 5, 2020 at 9:03 pm

            In WWII the Army gave cigarettes to soldiers free. Supposedly a calming effect. Not sure if that continued into the Korean Conflict.

          • Posted by E on May 6, 2020 at 12:18 am

            Different era for sure. When I was in high school, there was a smoking section on school grounds. If you were under 18, you needed a permission slip from your parents. Could you imagine signing that for your kid? This was 1985-1989.
            When I first started about 25% of the cops on my force smoked. Now? Not one.
            As most of you know, I enjoy a trip to a casino once in a while, I can’t stand that folks can STILL light up inside a NJ casino or PA for that matter. Disgusting.

          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 6, 2020 at 2:05 am

            When I was in high school, there was a smoking section on school grounds. If you were under 18, you needed a permission slip from your parents.
            We got them in 10th grade-no note needed, those days are long gone….Now you cannot use ANY tobacco products, including chewing tobacco, on/in/near ANY CA public building, not even NEAR it.

        • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 6, 2020 at 2:02 am

          My parents were happy I was leaving I think.
          Happy?? They threw a damn BLOCK PARTY!


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