Did the 1918–19 Influenza Pandemic kill the U.S. Life Insurance Industry?
29 Pages Posted: 31 Aug 2021
Date Written: August 29, 2021
No. We document two empirical facts for the U.S. life insurance sector during the 1918–19 Influenza pandemic. First, we find no significant differences among U.S. insurers’ profitability after 1918. Second, there were fewer insurers in distress after the pandemic outbreak. Using synthetic control methods, we argue that the demand increase for new life insurance policies mitigated financial difficulties for insurers. While catastrophic from a public health perspective, the pandemic was a “blessing in disguise” for the 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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