An Inconvenient (Actuarial) Truth

This article is an excerpt from Insider Weekly, the global investment newsletter focused on identifying asymmetric investment opportunities.

When you think of insurers, you conjure up images of slick talking salesmen with stern faces telling you in no uncertain terms that your loved ones will surely eat baked beans and live on a park bench should that parachute cord get stuck.

But really insurance is just about numbers and probabilities. And it is here where in truth insurance is about actuaries, not the suited folks who turn up on your doorstep reeking from too much aftershave. These are people who find math more interesting than sex and are therefore completely weird. But what they are is very bright, and we need them.

Most importantly, it’s darn tough to come at actuaries with emotional arguments because they’re dead to them. It’s like trying to get your poodle to eat lettuce.

The only thing actuaries are interested in is the numbers, which is why it’s worth following this sector as it prices risk.

For example, when Al Gore and his climate fanatics promised the world we’d all either have drowned or be living on a boat with Kevin Costner by 2012, I watched insurance premiums on beachfront real estate.


Weird, heh? The masses, spurred on by millionaires (who used the ruse to join the ranks of billionaires) were spoon-fed fearporn by the billionaire-owned propaganda channels, resulting in folks scurrying about, anxious for a solution to this impending doom.

The good ol’ problem (climate change), action (carbon taxes), solution (catastrophe averted) worked like a charm.

And as mentioned, the quants never repriced any risk on beachfront real estate.

Fast forward today and…

Indiana life insurance CEO says deaths are up 40% among people ages 18-64 | Indiana |

“And what we saw just in third quarter, we’re seeing it continue into fourth quarter, is that death rates are up 40% over what they were pre-pandemic,” he said.

“Just to give you an idea of how bad that is, a three-sigma or a one-in-200-year catastrophe would be 10% increase over pre-pandemic,” he said. “So 40% is just unheard of.”

Next up…

Primerica also said it paid $2.1 billion in term life death claims in 2021. That’s up from $594 million in spending on death claims and other forms of term life benefits in 2020, and up from $475 million in 2019, before the COVID-19 pandemic began.

Thus far health insurers have — due to the uncertainty with Covid — typically excluded complications caused by Covid in their policies (the old opt out strategy), and for those who have not, they initially simply waived care and then charged it separately.

Insurers never, ever like taking unknown risks.

I spoke with one particular actuary who works for a medium-sized health insurer pricing risk. They’re always tracking the data in order to price and reprice where necessary, their policies.

With life insurance it’s simple: No real repricing took place during this “pandemic”.

Deaths just never materialised for 2020 as they all expected. 2021 was the same… up until the last quarter when things changed. And this is where what was mentioned above comes to light. Folks are now dying, and not in the age groups anticipated or expected and definitely not in the age groups that Covid affects most – the old and infirm. The brainboxes are looking at some worrying numbers and repricing risk accordingly.

This brings up the second thing worth considering.

Insurers collect premiums and invest them into yield bearing instruments. Corporate debt and real estate are principal in their portfolios. What happens when payout ratios exceed premiums earned?

Insurers will become forced sellers in order to meet payments.

Also look at corporate debt, which is at all time highs. And why wouldn’t it be? The Fed has kept interest rates artificially low, incentivising this accumulation of debt.

As you can see, life insurance makes up a whopping 20% of the US corporate bond market.

Now if… and I say “if” because we don’t know for sure… but if insurers are facing a “3 sigma, once in a 200-year catastrophe”, then they’re going to have to raid the piggy bank to stay afloat. Premiums collected were all based on the stats that said young and middle aged people don’t just randomly die. Now they are. So the corporate bond market may just be about to have a steady stream of bids turn into offers.

If 20% of any market goes from buyer to seller, you’ve got a problem.

As they sell assets to cover short-term immediate liabilities, they’ll be selling those (largely) bond positions right as inflation is kicking in… and who wants to own bonds in an inflation?


What else? They can jack premiums. Which they will undoubtedly do, but payouts are typically amortized such that you pay out over time… not in a short hard hit. This is why they have those pesky “act of God” clauses in those contracts.

What about exclusions? Sure, if they can isolate a particular illness, but what if it becomes clear the vaccines are causing weakened immune systems which result in deaths from multiple differing ailments (as has been warned many times by folks such as Dr. Sucharit BhakdiPierre Kory, and hundreds of others)?

It’s too early to know how this plays out. The quants can’t at this point accurately analyse risk profiles across multiple different ailments and age groups, since this is all new. So for now, our interest here is in identifying the insurance sector both as a potential opportunity and a catalyst for possible second order consequences.

The flip side

Not to sound like a schizophrenic, but inflation is typically good for insurers. Insurers collect money today and only pay out over time (based on today’s currency value). They offer a natural hedge to inflation. We should be bullish. Certainly things have been looking good for them.

Here’s the SPDR Insurance ETF over the last three years.

It has protected investors from inflation and outperformed the S&P 500. A job well done!

One reason that we’ve been hesitant to get involved is the fact mentioned above. They hold a lot of fixed income and real estate and THAT, at the tail end of a debt supercycle, represents a risk we’d just rather not take.

Now that there is the potential they have massive payouts unaccounted for simply increases the risks in the sector. This is something I think worth watching because I can’t see the bean counters being influenced by assurances of “safe and effective” or that deaths are “unrelated”. Given the amount of censorship and suppression these days, don’t expect to see any statements being made about “the thing that cannot be named”.

But we’ll see it in life insurance being repriced.

If cancer deaths and numerous auto-immune diseases continue to spiral, insurers will still have to pay out on those life insurance policies while repricing new ones. My suspicion is that many folks will simply be priced out of this market and hence not insure. For many in the developed world this may seem crazy to them, but realise that in the developing world very few take out life insurance. That’s what seems likely to happen in the developed world. A shrinking industry since health and life insurance is really a disposable income expense.

So… what does this mean for us?

Good question. Let’s recap. From a risk reward basis (which is how we look at everything) while insurers are good to own in an inflationary environment, this little “problem” may lead to unintended consequences and insurers having to meet payouts they’d not accounted for.

This would entail them selling portfolio assets right when those asset classes are overvalued, and seeing a declining market to sell their products to.

So then what?

Probably just another factor in the rotation of capital – from over valued assets, like bonds, into undervalued asset classes that are forgotten, cheap, and critical to civilization. For the last few years we have been positioning for this via our Insider program. If you want access to the newsletter (with stock tips) only you can grab that here.

To highlight this point visually:

Value (purple), Bonds (orange), Growth (blue)

Here is the iShares Russell 1000 Value ETF (IWD) in purple, up 23.13% last year.

Then we have the iShares 7-10 Year Treasury Bond ETF (IEF) in orange, returning -3.45%, and the ARK Innovation Fund, which is the poster child of the “growth” stocks with a -38.48% return.

Keep your eye on the insurance sector

It’s an evidence based sector in a world where the truth is harder and harder to find.

If these companies begin repricing deaths following this initial spike, then we may be in for some overall fireworks socially as well as in the market, because with all the intense propaganda around “the thing that shall not be named”, any impact to the trust in this narrative could absolutely create significant ramifications for entire asset classes globally.


This Post Has 11 Comments

  1. Kenan Meyer

    Don’t worry. As soon as we are all vaccinated the excess death rate will disappear.
    This “inconvinient truth” has been widely reported in the alternative media. So, in order to verify it I digged up the source, a conference call of the Indiana chamber of commerce, which is still available on youtube. OneAmerica CEO Scott Daviso begins at about min 21. 80% of what he said has been quoted correctly, he also said that these figures were confirmed industrywide, but his conclusions have been left out:he said that all excess deaths were unvaccinated and that he is going to make vaccination mandatory in his company….Doesn’t make sense to me at all short of creating another conspiracy theory.

    1. Amit Roy

      So based on this article, insurers are seeing a 40% higher death rate in 2021 than other years and point to Covid vaccines as being a potential cause.

      The vaccine program really started in the US for the age group mentioned in March 2021. If vaccines are the problem, how is it that it is completely destroying the immune system and causing cancer/auto immune disease (also in the article) in a matter of few months. If you know anything about cancer, outside of 2-3 highly malignant types, it takes a while to kill you. Health Insurance quants would already have picked up those stats if that were the case.

      I’m calling BS to this article, trying to push an alternate narrative and build a compelling story but your timeline appears incorrect. I was on the fence trying to see if some of your “analysis” in the insider weekly is actually worth paying for, so thanks for posting this article as it’s clear you let your politics drive your analysis.

      1. Chris MacIntosh

        It’s clear you didn’t read the entire article. Our point of focus is on insurers, what they hold on their books, what their liabilities may be and hence how they’re valued since ordinarily insurers benefit in inflation.

        1. Amit Roy

          I did dude, but your numbers and timeline don’t pan out as per your “analysis”. Do you have a timeline in 2021 of the 40% additional deaths that is being attributed to the vaccines….? It’s clear that you are just pandering to the conspiracy crowd.

          1. Chris MacIntosh

            Insurers are seeing a massive problem. Don’t believe me? Call some up. Correlation may not be causation but it doesn’t matter. If this persists the insurers will need to raise equity capital to meet unaccounted for payouts. Either that or sell assets. Both are dilutive and the market isn’t currently pricing any of this. How is that “pandering” to any “conspiracy”? You can go “conspiracy” yourself up the wazoo, this is simple math if you analyse their balance sheets and income statements. WTF are you talking about?

    2. Josh Mooney

      You must have been watching a different video Kenan, in the one I watched, he at no point states ” All excess deaths are unvaccinated.” He is pro vaccine and suggests mandating his own company and increasing premiums for employers in low vaccinated areas. He doesn’t offer evidence for this position and really appears to be struggling for an explanation. Listen (again) from 21m20s…

      For this spike in working age deaths to occur through the third and fourth quarters of 2021, after COVID had been circulating in the US population for 18 months already, while decreasing in virulence over that time, suggests something changed. Was a significant new variable introduced through 2021?

      I’m sure his actuaries will help him connect the dots and soon.

      Certainly, increase in suicides, missed treatments for serious diseases etc… were an obvious and anticipated fall out from the lockdowns, constant fear porn and all the other idiotic “prevention” measures. But this but doesn’t come close to explaining the “unprecedented” 40% increase.

      I believe time will reveal a significant portion of the increase to be due to the experimental, vaccine/gene-therapies and Chris is astute here, musing on how such a scenario, if it does transpire, would play out and how to position.

  2. Robert

    Gobsmacking Chris……the canary in the coalmine, the smoking gun, Monica’s blouse etc. Kenan above has shown they are already spinning it as the unvaxxed. But that won’t fly in Oz, UK,& NZ with over 90% vaxxed. We need to see those Insurance numbers. Maybe in NZ they don’t use the clot shot, so the billionaire refugees have worker ants?

    Just trying to process this. Hopefully with the UK, Ireland & Denmark taking back all mandates & lockdowns, the end of this madness is near.

  3. Marco De Pellegrin

    Dear Mr. MacIntosh,
    Thank you for your very interesting article.
    As a Civil Engineer specialising in Hydrology, I have written professional software targeted at statistics of extremes (Gumbel, LogNormal, etc.) and would like to re-analyse (some of) the data these actuaries have been looking at.
    I see that -in general- comparisons are made with the last 5 years only; I think it would be more accurate to use at least 30yrs.
    Can you suggest where to find the raw data?

    1. Chris MacIntosh

      I’ve only spoken with the Insurance companies. I’d reach out to any of them as it’d be their data they’re bringing in.

  4. Roy Hobbs

    Most of the developing world is an aging population, and IF sarscov2 affects those societies, it may speed up the path to death, or quarterly death accumulation, because (and don’t forget this) the pathogen is the spike protein. Oh wait, that’s what the injection is? Whoops. Amit Roy points out a red herring to distract, for now. What do we see for the healthiest people in the world (youth and athletes)? Myocarditis, tissue and vessel inflammation, and beyond. Why? SarsCov2 is and always has been a vasculitis, that particular people are susceptible to for really bad outcomes (the fat, diabetic, and probably some genetic profile to boot). I saw it on CT scans in late 2019 and 2020 all the time, less so more frequently, but it is there. If you look at the curves it is clear that most detrimental results and numbers regarding mortality and morbidity are after the mass jab experiment was fully underway.

    Mr. MacIntosh isn’t political, Mr. Roy, you are. I’ve followed the evidence from day 1 for this nothing burger, and the WHO and CDC lied to us from day 1. Shall I list how many times that happened? Surely, they aren’t the political ones right? Oh yeah, it must be guys like me and Chris. Sure. Go get jab 4 and tell me how “safe” and “effectve” that treatment is. You can’t make this stuff up, it’s so stupid and obvious at this point.

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