I've rarely run into a topic as polarizing as the “Vax” the Covid 19 Vaccine in my professional life. From all reports, by now nearly half the population have themselves taken the Vax, while nearly half the population has now.
This means that each group has made up their mind on the pro or anti-vax issue. And generally have a very personal vested interest in its efficacy.
So, when I raised the interesting issue of One America Mutual Life Insurance Company, with a couple of friends of mine this weekend, I quickly found myself mired in the pro/anti-vax debate.
We all know both sides of the argument by now. So, I don't want to go down that path with you today.
Instead, I would like to approach a slightly different issue with you, on my third try.
As investors, let's you and I address the recent report by Scott Davidson, the CEO of One America, to a business round table in Indiana, One America's home state.
First a little background.
One America is a Mutual Life Insurance Company that's been around since 1877. It currently holds 100 billion dollars in Policy Holders assets. And those policyholders are Mr. Davidson's only constituents.
Unlike a publicly-traded insurance company, Davidson has no shareholders to cater to. The policyholders own the company. So, he can “call it like it is” with no worry about how his comments might affect the company's share price. There is no public stock on One America.
Now a primary business segment for One America is the Group Life Segment. This division works with businesses to provide life insurance for their workers, aged 18 to 64 years. We can assume that these individuals are fairly healthy, in that they are, after all, gainfully employed.
But we don't have to make any assumptions about the people insured. Because the results are so astonishing.
Boiling Davidson's story down to the essential One America sailed through the first year of the Pandemic, and most of last year, with little change in their mortality rates. While the number of Covid deaths, apparently rose, other forms of death declined, so the total number of deaths in 2020 and the first part of 2021 remained the same.
But everything changed in the third quarter of 2021. And it is this quarter that Davidson focuses on. In that fateful third quarter of last year total deaths jumped by 40%. Something the company had not seen in its 143 years of operation.
Davidson said that while a 10% rise in the number of deaths would be equivalent to a one in 200-year event. Last year's rise in deaths, is simply off the scale. Larger than could ever be expected.
And I suspect that this is the real reason that Mr. Davidson wanted to gain a public forum. This simply can't continue and allow One America to meet its current life insurance settlements. At some point, something needs to change.
But Davidson went on to say that nothing is changing. This accelerated death rate continued throughout the fourth quarter last year.
And this is the point, that both I and Mr. Davidson are trying to make. People are dying. Passing from this world at an unprecedented rate.
And for investors, perhaps that's the bottom line. The Life Insurance Industry is in for some really tough times. We need to be aware.
As for what is causing all of this. Our understanding of that will come in due course.
For now, we need to know this undeniable fact: People are dying like never before.