Did the 1918–19 Influenza Pandemic kill the U.S. Life Insurance Industry?

Cortes, Gustavo; Verdickt, Gertjan

doi:10.2139/ssrn.3913593

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Did the 1918–19 Influenza Pandemic kill the U.S. Life Insurance Industry?

29 Pages Posted: 31 Aug 2021

See all articles by Gustavo Cortes

Gustavo Cortes

Warrington College of Business, University of Florida

Gertjan Verdickt

KU Leuven, Department Accounting, Finance and Insurance

Date Written: August 29, 2021

Abstract

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

Suggested Citation: Suggested Citation

Cortes, Gustavo and Verdickt, Gertjan, Did the 1918–19 Influenza Pandemic kill the U.S. Life Insurance Industry? (August 29, 2021). Available at SSRN: https://ssrn.com/abstract=3913593 or http://dx.doi.org/10.2139/ssrn.3913593