# On COVID Vaccine: Do the Math

The full FDA approval of the Pfizer vaccine is an enormous development in the fight against the COVID-19 global pandemic. Already, there has been a steady increase in the rate of daily vaccinations, though still way below what is needed to stop the surge of the Delta variant. I have been trying my best to educate the public and state and federal officials for years now about the dangers of the anti-vaccination movement. Anti-vaxxers challenge the science they don’t understand or have been lied to about it. Let’s try the math.

Back in April, the incidence rate for the Delta variant was 0.1% among COVID cases. The little children in my math classes can tell you that means one tenth of one percent. Today, the Delta variant accounts for 86% of all cases and 95% of the hospitalizations and 99.5% of the deaths. Intensive care units in the Deep South are overwhelmed and turning away non-COVID patients, including cardiac arrests. Is it a coincidence that Alabama and Mississippi have the lowest vaccination rates in the country? Florida now has more COVID-19 cases than any state since the beginning of this pandemic.

The FDA approval process was based on a 91% effectiveness rate in preventing the disease from spreading person to person. The Delta variant is spread like the common cold and is more contagious than smallpox. The Centers for Disease Control and Prevention (CDC) declared the Delta variant one of the most infectious respiratory viruses in history. The protection rate for non-vaccinated people is 0%.

This full approval comes just days after the FDA approval for the third shot or booster shot. The reason for the booster shot after eight months is the math. The COVID vaccine was found to hold at 92% effective against serious illness and hospitalization from initial COVID-19 cases but only 64% effective against the Delta variant. I, too, was delighted when the COVID-19 restrictions were lifted after being in lockdown in New Jersey for over a year, an early epicenter with more deaths per capita than any other state. I have been going out to dinner virtually every day at a NJ diner. But the war turned out not to be over. What happened? The disease mutated right out of a horror movie.

A recent Kaiser study found that two-thirds of the non-vaccinated people in the country believe in myths and hoaxes about the safety of vaccinations. (See my ITL articles on vaccinations.) The UN and the World Health Organization have called this problem an “infodemic.” The U.S. Surgeon General has added that this health misinformation is now a serious public health threat.

I am thrilled with the movement now by both public and private institutions, employers, hospitals, nursing homes, colleges, sports teams, restaurants, etc.  requiring proof of vaccinations or at minimum a recent negative COVID test. However, a negative test on Monday means nothing on Tuesday.

What is needed is a huge public campaign to educate four core groups of unvaccinated people in this country. Black and Hispanic populations, young adults between 18 and 26 years of age and the Deep South. Where is the Concert for COVID Vaccines? Where are the sports stars whom people idolize coming out for vaccinations instead of trying to sell me stuff on TV?  Want to see Billy Joel at Madison Square Garden? Get vaccinated at the show! Where are the country music stars? Hispanic music stars? Black music stars?

There are now 60,000 new cases a day reported of the Delta variant, up from 24,000 cases per day from a few weeks ago. Do the math: 24,000 cases a day is 1,000 new cases an hour. Now it is 2,500 new cases an hour and getting worse. We have already lost over 600,000 people to this horrible pandemic. We went to war when we lost 3,000 Americans at Pearl Harbor, and 60 years later we went to war when we lost another 3,000 on 9/11.

I don’t want to hear another word about “freedom” from anti-vaccination folks. You are not free to spread a horrible disease to other Americans and their families any more than you are free to be drunk on our highways. Unfortunately, it has now also been reported that the rate of normally routine childhood vaccinations for polio, measles, whooping cough and tetanus is way behind schedule for the re-opening of schools and is now also a major concern. All the political rhetoric and misinformation on vaccines is having a terrible ripple effect.

We can do this America. Do the math. How do you think polio, smallpox, malaria and childhood diseases like the measles were eliminated? By the scientific development and widespread use of vaccines. Why are these diseases making a comeback? The anti-vaccination movement.

I’ll see you at the concert for COVID vaccinations. Can I get my booster shot there?

# Long COVID – a Troubling Legacy

Sufferers of long COVID are often referred to as “long haulers” because symptoms can last for weeks or even months. And it is not just a person’s health that is affected for the long-term; there are many other knock-on impacts of extended symptoms, such as impact on life insurance, that industries will now have to consider and adapt to.

Much remains unknown, but the first step to navigating this new territory, for life insurance is to understand the data we do have so far.

Symptoms of long COVID

What do we know about long COVID?

We know that symptoms — shown in Table 1 below — may occur continuously or in a relapsing pattern. The symptoms may simply persist for a long time following the initial infection of COVID-19, or, over time people may experience new symptoms.

Interestingly, by far the majority of patients with long COVID test negative for the virus, indicating microbiological recovery. As such, the causes of long COVID remain uncertain. Possible explanations include organ damage from the virus, exaggerated immune or autoimmune responses and persistent but undetectable viral reservoir.

Classification of long COVID

Experts have also started to classify long COVID in two different stages. The first, referred to as post-acute COVID, applies to cases where symptoms persist for more than three but less than 12 weeks after the initial infection. The second, called chronic COVID, applies to instances where symptoms persist for more than 12 weeks following initial infection.

Experts also suggest that an alternative way of classifying long COVID is according to the predominant residual symptom experienced. Based on this approach, sufferers can be classified as having post-COVID cardiorespiratory syndrome, meaning likely to suffer with breathing problems; post-COVID fatigue syndrome, meaning likely to feel persistent low energy levels; or post-COVID neuro-psychiatric syndrome, meaning likely to experience cognitive dysfunction such as depression, anxiety or brain fog.

Risk factors for long COVID

What do we know about who is most likely to develop long COVID?

Data suggests that patients hospitalized during the initial COVID-19 infection have an increased risk of developing long COVID (87%) compared with those treated with outpatient COVID-19 (10% to 35%). Hospitalized patients are also more likely to sustain organ damage from their initial infection, leading to prolonged symptoms.

What’s more, the number of symptoms presented at the time of initial infection appears to predict the likelihood of a person developing long COVID. The more symptoms at initial infection, the higher the risk of developing a long COVID syndrome of some kind.

Long COVID is more commonly reported in adults aged 50-plus, although it can occur in any age group, including children.

Individuals with co-morbid disorders, and in particular co-morbid psychiatric disorders, such as depression or anxiety, have an increased risk of developing long COVID after infection. The more co-morbidities, it appears, the higher the risk.

Long COVID and Morbidity

The link between long COVID and morbidity must be continuously assessed. At this early stage, not enough data exists to provide a clear understanding.

That said, wide varieties of new-onset pulmonary and extra-pulmonary disorders, meaning conditions associated with the lungs, have been observed in long COVID patients, including interstitial lung disease and respiratory failure. Table 2 shows a list of the extra-pulmonary conditions associated with long COVID.

Additionally, according to a recent longitudinal study of more than 73,000 U.S. veterans with a history of outpatient COVID-19 infection, there was an increase in observed short-term mortality at six months, when compared with veterans with no history of COVID-19 infection. However, the picture is far from complete, and more research is required for an accurate understanding of the mortality associations of various long COVID syndromes.

Evaluation of long COVID for life insurance purposes

When it comes to evaluating the associated risks of a person experiencing long COVID, the predominant residual symptom profile should be used to guide the evaluation. For example, if the predominant symptoms presented are shortness of breath and chest pain, cardiorespiratory investigations such as lung function tests, EKG, echo or chest imaging should be conducted.

For more general symptom profiles, blood and imaging tests will need to be conducted, guided by clinical assessment, and may include tests such as complete blood count, liver and renal function analysis, urinalysis, D-dimer assay testing (which screens for clots or deep vein thrombosis), inflammatory marker testing (which evaluates the presence of inflammation) and NT proBNP testing (which detects signs of heart failure).

Underwriting considerations

When it comes to life insurance underwriting, there is some early-stage guidance to help navigate this new territory. One of the most important factors to consider is adjusting ratings in the case of any evidence of organ damage. To date, though, for sufferers of long COVID with no evidence of organ damage, there does not appear to be any significant excess mortality risk to take into account when underwriting.

As with any emerging condition, the picture we have today, and the industry’s understanding of risk, will become a lot clearer in time. What’s needed now is continued study and analysis of patterns so new underwriting rules can be developed. One thing is for sure, though: The COVID-19 virus is leaving a troubling legacy.

# The Need for Speed in Underwriting

From delay born of pandemic to decisiveness borne by leaders with a plan, from anger born of isolation to action borne by people’s refusal to isolate themselves from the world, the authors of the first chapter of post-pandemic life—the writers of this history—are the underwriters of life insurance. The men and women responsible for the expansion of accelerated underwriting deserve their place in history.

The public has a right to know, and the insurance industry has a duty to promote, what accelerated underwriting is: that new technologies make it fast and affordable to review life insurance applications; that insurers can check prescriptions, driving records and all relevant records in minutes; that this process is safe and noninvasive, free of undergoing a physical or having someone enter a physical premise.

Because of a combination of timing and technology, accelerated underwriting is no longer an option for the few. Because of the times in which we live, accelerated underwriting may become a preference of the many. Because of these things and more, including the need to slow or stop the spread of COVID-19, accelerated underwriting may save lives while increasing sales of life insurance. But people cannot buy what they do not know exists.

People need to know that eligibility does not depend on electability, that they do not have to elect to put themselves at risk so as to have insurers assess the risks of issuing life insurance. What is available online avails insurers the opportunity to earn the trust of consumers. What sustains this trust is what accelerates the means by which consumers can create trusts or tax-free income, thanks to owning life insurance. What makes this trust possible in the first place is accelerated underwriting.

The terms may differ, the terms do differ, but the conditions are the same; that is to say, accelerated underwriting is not conditioned on strangers visiting applicants’ homes.

Matters of personal health are a matter of public health, such that people of a certain age or condition do not want to increase their vulnerability or lower their immunity to illness. Put another way, no one wants to die from life insurance, though many want to die with life insurance.

Accelerated underwriting is true to its name, using technology to collect and analyze data. From there, insurers can determine specific costs for specific consumers. The process is efficient and economical for everyone, allowing insurers to write more policies while enabling consumers to compare prices. But again, the information that furthers accelerated underwriting begins with the information insurers give consumers.

Accelerated underwriting is a universal good, based on the good of intelligence, for the purchase of goods in the form of life insurance. The result serves the common good, strengthening individuals and families. For this good to flourish, acts of goodness demand swift and secure action.

Now is the time to accelerate the use of accelerated underwriting, so we may speed up the day when all who want life insurance can have it.

# Biggest Risks to an Economic Recovery

With much of the world beginning to reopen and global economies beginning to recover, there are many reasons to feel confident in the direction that the global economy is heading, including successful immunization campaigns in advanced economies and promising projections for global GDP and trade, which our latest research predicts will see global 5.5% and 7.7%  growth respectively. Despite these positive trends, there are potential cracks in the armor that every business leader should be aware of as we continue to grapple with the world’s grand re-opening.

Vaccine Security

The first and perhaps most obvious risk factor the economic research team at Euler Hermes has identified is vaccine security. While advanced economies delivered on immunization campaigns, under-vaccination in Asia and other emerging markets may cause desynchronized growth paths. Avoiding the vaccination fatigue trap will be key for a sustainable reopening as demand side hurdles (such as vaccine hesitancy) are now following the supply-side ones. In the meantime, under-vaccination in Asia and in emerging markets may desync growth paths. Stop-and-go government strategies to cope with the increase in new cases – albeit more moderate than previous waves — are likely to continue and could hinder economic recoveries in these markets.

Inflation

Every economy’s biggest boogie man is inflation. While it’s often spoken about as a risk factor, we are seeing signs that, this time around, it could pose a real threat. Bottlenecks in terms of supply (raw materials, transportation capacity and workers) will likely keep inflation above normal until the end of 2021. Global inflationary pressures are indeed at record highs, but the good news is that they are mainly driven by energy prices and temporary disruptions of global supply chains. In 2022, pressures from labor shortages should reduce along with the rise in input prices, but businesses should exercise caution and watch inflation closely in the interim.

Also contributing to inflation fears is the average household’s pent-up demand. We estimate pent-up consumption at 3% of GDP in the U.S. and U.K. in 2021 and at around 1.5% in most European countries. Consumption will lead the recovery, but hoarding behaviors (such as putting stimulus money directly into savings accounts) remain, and that could complicate policy choices down the road. Still, we expect around 40% of the excess cash from households and companies (currently at more than 10% of GDP in both the U.S. and Europe) will morph into spending by year-end, thanks to high pent-up demand.

Massive state interventions helped suppress a significant wave of insolvencies in 2020, with the year ending with a 12% drop globally rather than a 40% surge, which we predict would have been seen without government assistance. What now becomes tricky is how global governments can phase out these assistance programs without causing a renewed fiscal crisis.

U.S. Politics

This one won’t come as a shock to most economic observers. The U.S. has launched a wave of global and multilateral initiatives for climate change and tax policies. Such a revival in international engagement does not necessarily mean unselective multilateralism: so far in 2021, the U.S. has been the most active with trade protectionist measures, which could complicate the recovery of a global supply chain.

The economic picture is improving, but business leaders must remain vigilant and consider all possible risk prevention solutions to best mitigate downturns and protect their balance sheets.

# Long-Term Disability in the Time of COVID-19

Through creative destruction, weak businesses shrink and stronger ones expand. The ripple effect of all that disruption often washes ashore at group long-term disability (LTD) insurers, where disability claim costs tend to increase during recessions — new claim submissions rise while claim recoveries fall.

Sadly, studying the effect of past downturns on group LTD isn’t entirely straightforward. Every economic decline comes with a unique context — a tangle of related causes and effects, all of which can affect LTD claims in different ways. And because the economic shock of 2020 was created by a global pandemic and not a financial crash or inflation scare, COVID-19’s implications are especially difficult to unwind.

Disability carriers still need to try.

Understanding the Three R’s…

The three R’s are a good place to start. I’m not referring to reading, writing and ‘rithmetic but to the three rates that drive LTD experience: incidence rates (new claims), termination rates (closed claims) and interest rates. When it comes to these R’s, carriers should avoid the temptation to look too intently at the past for clues to the future.

To understand why, consider the lessons of the Great Recession of 2008. This decline was caused by a financial contagion — a liquidity crisis brought on by subprime lending. This led to a contraction in most sectors while the typically recession-resistant “HUGE” sectors (healthcare, utilities, government and education), in fact, grew. New claim submissions initially dipped as employees deferred claims in a bid to cling to employment or lost jobs too abruptly to file claims.

Eventually, however, new LTD claims rose and remained elevated for years before returning to pre-recession levels. Claim termination rates, too, deteriorated during the recession but rebounded quickly during the recovery. Lastly, an increase in asset defaults and lower portfolio yields strained the income statement of LTD insurers.

… and a K

But this is not 2008. Fast forward to today, and it’s clear that, as former U.S. Federal Reserve Governor Kevin Warsh put it, “If you’ve seen one financial crisis, you’ve seen one financial crisis.” Every recession is unique, and the pandemic-driven decline is particularly unprecedented. In fact, the form this recession may be taking has joined a growing alphabet soup of economic terms. Readers may be familiar with the optimistic V-shaped recovery pattern as well as the pessimistic L-shaped, with U- , W- , and Z-shapes falling somewhere in between. Economists are now introducing the notion that the post-pandemic recovery could look more K-shaped. Think of the vertical line of the K as the starting point from which different parts of the economy diverge: Some sectors grow while others decline. The market has been bullish on companies that support the “quarantine lifestyle” but was less kind to smaller companies as well as those situated in the travel and hospitality industries.

Given a K-shaped recovery scenario, group LTD carriers may ask themselves how much of the business mix is in the upper versus the lower arm of the K. If most of a block is focused on high technology and well-capitalized firms, it makes little sense to adopt overly conservative underwriting or pricing adjustments. But it may be prudent to keep a more watchful eye on business blocks with significant exposure to “lower arm” economic sectors.

Recession-resistant sectors are not necessarily pandemic-resistant.

This new K shape is already challenging long-held expectations about which industries represent good disability risks. The previous notion that certain industries are resilient in recessions is now being turned on its head. That’s because recession-resistant sectors are not necessarily pandemic-resistant. For example, unemployment rates during the 2020 COVID-19 pandemic followed a pattern never seen before, sharply spiking during spring lockdowns — and causing job losses in every single sector of the economy.

Morbidity Bersus Mortality

It is easy to see the effects of this pandemic on group life insurance: COVID-19 has a direct and immediate impact on mortality rates. However, the effects on group LTD are much more opaque, as the morbidity impact is largely indirect and delayed. Mortality risk and morbidity risk may have polar-opposite reactions to COVID-19, both in terms of timing and direct linkage, but that is not to say that the financial impact will be wildly different. There are many “pandemic headwinds” facing group LTD carriers, and it’s just a matter of time before these trends crystallize.

For example, the pandemic has strained hospital systems worldwide, leading to deferred preventative care and interrupted treatments that could result not only in a wave of deferred claims, but also sicker insured individuals. Prolonged lockdowns, reports of rising burnout levels among essential workers, particularly in healthcare, and the long-term loss of employment will likely contribute to additional mental and nervous claims. In addition, some survivors of COVID-19 — even those who had mild versions of the disease — continue to report a debilitating constellation of symptoms long after their initial recovery. Called post-COVID-19 syndrome or “long COVID-19,” this condition has generated growing concern among public health providers and disability insurers and is being researched. In RGA-led industry surveys, many disability carrier participants report significant concern over the pandemic’s potential to reduce recovery and return-to-work rates among the long-term disabled.

And while much about the first pandemic recession is new, one fact remains the same in every downturn: The longer economic problems persist, the greater the risk that long-term disability claims experience will worsen.

Keeping Perspective

While these headwinds are troubling, it is important to keep risks in perspective. For example, not all deferred healthcare signals an increased risk of short- or long-term disability claims. Also, mental health is fluid, and sources such as the mental health index Total Brain show that if the conditions contributing to symptoms of depression and anxiety are relieved — such as through the end of a pandemic or recession — the additional likelihood of psychiatric disability claims is mitigated. This is good news in light of the current thinking from economists that the recession may technically already be over and the recovery begun. If so, the recession would be the shortest in U.S. history.

Similarly, elimination periods (EP) should mitigate much of the direct effect of the pandemic on disability claims as a 90-180 EP usually lasts longer than a coronavirus case. Even a diagnosis of long-COVID-19 may not necessarily result in long-term disability. The “long” in long-COVID-19 is in comparison with a typical flu duration of three to four weeks, not the “long” that we infer with long-term disability claims. While most long-COVID-19 cases at present have durations measured in months, it is also too early to truly understand the long-term health consequences of this disease. Said differently, a tidal wave of COVID-19 LTD claims does not appear to be on the horizon, but continuing research points to a few ripples headed our way.

Pressures brought by the pandemic also have led to some unexpected positive developments. Recovery from some disabilities may be made easier by work-from-home measures, just as lockdowns led to faster consumer acceptance of wellness and digital health technologies. Telehealth, for example, has proven to be a very viable and cost-effective alternative to in-person doctor visits. Public health mandates like social distancing and mask-wearing also appear to be suppressing the spread of other infectious diseases such as the seasonal flu. The blisteringly fast pace of COVID-19 vaccine development has opened our eyes to what is possible in virology and paved the way for faster advances in vaccine science.