Mortality data published today by Sweden’s biggest pension fund Alecta show a huge spike in deaths among its customers in April and May due to the coronavirus, with the oldest group clearly the hardest hit.
In its financial report for January to June, Alecta said: “As a direct result of COVID-19, mortality in Alecta’s insurance portfolio has been significantly higher than normal in April and May.”
Preliminary figures showed a 10% increase in deaths among men between 18–64 in the two-month period, but a 43% increase in deaths among those aged 90 or older. For women, the corresponding figures were 7% and 42%, respectively, the pension fund said.
“We have seen an increase in mortality in all age groups, and among both men and women, but it is clear that the oldest have been hardest hit by the pandemic,” Alecta said.
The comparison is between the number of deaths in each group in April and May this year and the average for those two months in 2015-2019.
With 2.6 million pension customers in Sweden, Alecta’s client base amounts to a quarter of the Nordic country’s population.
In financial terms, the human tragedy of course translates to an easing of the burden on Alecta’s business.
“Since the dominant insurance risk for Alecta is the risk that the insured will live longer, the increase in mortality has led to the technical provisions decreasing by approximately SEK0.3bn [€29m),” it reported.
However, Alecta said market developments had a much greater effect on provisions than increased mortality, with the decline in interest rates in the first half triggering a hike in technical provisions of some SEK23.4bn.
In investment results, the fund posted investment losses for both defined benefit (DB) and defined contribution (DC) schemes for the first half, but said despite market turbulence in the first half, its solvency ratio never dipped below 140%.
The return for the default portfolio in the DC product Alecta Optimal Pension was -2.2% for January to June, down from 11.8% in the same period last year, while for the DB scheme, the return was -1.1% compared to a positive return of 8.5% in the first half of 2019.
The group solvency ratio was 157% at the end of June, down from 162% at the same point last year.
Alecta also reported that its total assets grew to SEK963bn from SEK905bn a year before.
Sweden’s political resistance to locking down its population in order to halt the spread of the new coronavirus has drawn attention internationally, with schools and restaurants remaining open while neighbouring countries had closed them.
But the policy has coincided with a markedly higher rate of deaths from COVID-19 in Sweden than that suffered by its neighbours.
In Sweden, 5,572 people have died from COVID 19 so far, compared to 253 in Norway, 328 in Finland and 610 in Denmark, according to the latest data from the World Health Organisation. Sweden’s population is around double that of each of the three neighbours.
According to the reference website Worldometer, seven European countries have higher rates of coronavirus death per million population than Sweden, including the UK, Belgium, Spain and Italy.