The financial impact of excess deaths in 2020 and 2021 has been relatively small, but the true repercussions of the pandemic — such as delayed diagnoses of chronic conditions — will be felt in the long term, the consultancy reported.
The overall impact on the health service and other factors affecting mortality figures could justify plan administrators and sponsors reducing life expectancies, although LCP urges them to familiarize themselves with the characteristics and specific experiences of their diets.
Other factors impacting mortality include flu rates, currently at a very low level, which the LCP says could be responsible for this year’s mortality rate being so similar to the pre-pandemic level. of 2019.
He suggested that the cost of living crisis could further widen inequalities in life expectancy, although there has been a marked decline in excess deaths among older age groups from the peaks reached during the pandemic.
LCP added that many directors and sponsors are placing more weight on longevity in their overall risk assessments and travel planning, and that – despite the uncertainty surrounding the true mortality rate – the pricing of longevity risk for longevity trades, redemptions and redemptions is at “its maximum”. competitive levels in recent years.
The slowdown in the improvement in life expectancy should prompt the government to review the planned increase in the legal retirement age from 2026, the pace of which, according to LCP, is now excessive.
Chris Tavener, LCP partner and author of the report, said: “As we begin to ‘live with Covid-19’, the potential longer-term impacts on mortality are more uncertain than ever. Analysis of emerging data, not only on deaths but also on the precursors of mortality, will be essential for refining mortality assumptions and making evidence-based decisions in the future.
“Combining actuarial advice and knowledge from a wider range of health experts to help analyze longer-term impacts is valuable in helping trustees and companies manage their retirement plans.”
Dr Jonathan Pearson-Stuttard, Head of Health Analytics at LCP, added: “The impact of the cost of living crisis will be compounded by the pressure that is already on the NHS post-pandemic, alongside the economic and social impacts of Covid-19. impact.
“People are waiting longer to access services, have to wait longer for operations and may even face delays in getting treatment in emergencies. Our research shows that these pressures will also be felt the hardest by those who need them most.
“A focused and proportionate effort will be needed to ensure that these twin crises do not combine to inflict a lasting legacy on the life expectancy of the most deprived populations,” he added.