Lessons for life insurers from 1918

University of Auckland senior finance lecturer Gertjan Verdickt wrote Risk Management in Deadly Times: The U.S. Life Insurance Industry in the 1918–9 Influenza Pandemic, with Gustavo Cortes.

They used data from US life insurance companies during the period and found that high-exposure insurers charged higher prices on new policies than those insurers that were less exposed.

The pandemic increased awareness of the importance of life insurance, they said, and price increases were a crucial risk management tool to help the sector withstand a surge in demand.

Verdick said the research found raising prices was an important strategy to help the industry navigate the catastrophic event.