Did the 1918–19 Influenza Pandemic Kill the U.S. Life Insurance Industry?

Abstract

No. Using a novel, hand-collected dataset of U.S. life insurance companies during the Influenza Pandemic of 1918–19, we show that high-exposure insurers charged higher prices on new policies vis-à-vis less exposed firms. Although the pandemic surprisingly increased mortality rates among younger adults, it also increased the awareness of the importance of life insurance. This increase in demand, coupled with efficient risk management through higher policy prices, prevented further bankruptcies. The pandemic, while devastating for public health, was not particularly severe to 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