Risk Management in Deadly Times: The U.S. Life Insurance Industry in the 1918-19 Influenza Pandemic
42 Pages Posted: 26 Sep 2020 Last revised: 8 Mar 2024
Date Written: March 7, 2024
Abstract
Using a novel, hand-collected dataset of U.S. life insurance companies during the Influenza Pandemic of 1918–19, we show that high-exposure life insurers charged higher prices on new policies vis-à-vis less exposed firms. Although the disease surprisingly increased the mortality rates among younger adults, it also increased awareness of the importance of life insurance. We argue that price increases were a crucial risk management tool. Coupled with a surge in demand and coverage, it prevented further financial distress. While devastating for public health, the 1918-19 Influenza Pandemic was not too severe for the life insurance industry.
Keywords: Spanish Flu Pandemic, 1918–19 Influenza, Life insurance firms, COVID-19
JEL Classification: N11, N12, N21, N22, N81, N82, G22, G52
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