The 3rd wave of the pandemic was the most widespread and deadly. Through 2020, we did not find evidence of protection on Life Settlement lives from COVID. However, in January 2021, at the peak of the 3rd wave, we saw the first signs that vaccines may be reducing excess mortality in Life Settlements. Many Life Settlement lives are in the highest priority cohorts for the vaccines and will likely experience significant protection in the coming months.
This post is a continuation of our previous analysis on COVID-19’s impact on Life Settlements.
Three Waves of the Pandemic
The 3rd wave of the COVID-19 pandemic was the most widespread and deadly. The 1st wave (March through May, 2020) was localized primarily to New York and the surrounding areas. The 2nd wave (July through September, 2020) hit mostly in the sunbelt. In the 3rd wave (November 2020 through January 2021), nearly every county across the US experienced high COVID-19 deaths per capita.
Source: NYTimes data
Note: NYTimes does not separate counties in New York City. In these plots, each of these counties receives the average deaths per 100k for the whole of NYC.
To bring to light the impact of the pandemic on the Life Settlements population, we estimated the Life Settlements monthly mortality rate in a world without COVID and compared this to actual monthly deaths. We estimated the trend and seasonality of Life Settlements mortality using data from 2014 through 2019 and used this to forecast monthly deaths starting in 2020. We used the population of Life Settlement lives that have received an ITM21st underwriting for our analysis.
Note: There is some discrepancy between these numbers and our previous analysis because we were able to expand the population under study. This does not affect the observed trends.
The 3rd wave was the deadliest for Life Settlements with approximately 252 excess deaths from November 2020 through January 2021. However, reported COVID mortality in the US was higher relative to Life Settlements than in either previous wave. Life Settlements excess deaths dropped significantly in January, possibly caused by early vaccinations (more on this below).
No Evidence of COVID Protection on Life Settlements in 2020
Throughout 2020, we did not detect Life Settlements protection from COVID death relative to the US public. This conclusion is based on analysis of our equal-risk and relative risk estimates. The equal-risk estimate models expected deaths by matching Life Settlement lives’ county of residence to reported COVID deaths in each county. Since each wave is geographically heterogeneous, this helps create a more accurate picture of COVID’s expected impact on Life Settlements. The COVID risk factor is the ratio of actual Life Settlement deaths to this equal-risk estimate.
In our earlier analysis, we estimated that the Life Settlement population is 8.6 – 10.5 times more vulnerable to COVID death than the overall US population. Comparing the risk factor to this relative risk range, we can study any potential protection from COVID for Life Settlements. The cumulative risk factor remained steadily in this range throughout 2020, suggesting no COVID protection on Life Settlements.
* Based on an estimated 10x relative risk to COVID mortality.
Evidence of Vaccines Helping
Early vaccines may have helped reduce Life Settlements mortality in January, as we forecasted in our December update. Four million Americans had received one dose of vaccine by January 1st, 2021. By mid-month, 11 million had received one dose, and an additional 1.5 million had received the second dose. Many Life Settlement lives are in the highest priority cohorts for the vaccine.
We estimate there were 52 excess Life Settlement deaths in January 2021, compared to 16.5 equal-risk expected, resulting in a low risk factor of about 3. It is too early to draw definitive conclusions, however a comparison of deaths in December 2020 to January 2021 shows a distinct decrease in deaths for ages 85+, despite more nationally reported COVID deaths in January (98,000 in January compared to 72,000 in December). This age cohort would have been first in line to receive the vaccine, making this the first potential indication that the vaccine is reducing COVID mortality in Life Settlements.
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