The Traveling Actuary: Exploring New Horizons
By Jing Lang and Dirk Nieder
Reinsurance News, June 2025
Editor’s note: The COVID-19 pandemic caused global upheaval, significantly impacting travel and daily life. In a series of diary entries [1, 2, 3], the Traveling Actuary documented his experiences navigating the evolving situation, from the initial outbreak in Wuhan, China, through the subsequent waves and lockdowns in various countries.
It is March 2025. I find myself in Yuzawa, a town in Japan known for its deep powder snow. Yuzawa is said to be the only ski resort in the world with a Shinkansen (Japan’s high-speed railway) station, making it possible to reach its slopes from Tokyo in under two hours.
After an enjoyable day of skiing, I am now unwinding in the hot waters of a nearby onsen pool. The onsen, crafted from stones and sheltered by a wooden roof, is surrounded by trees. Snow piles up around the pool, dusting the tree branches, while steam rises from the hot water.
As photography is strictly prohibited in the onsen, I created an AI-generated image to capture the scene. I realized on this occasion how amazingly photorealistic the images generated by AI can be, but also how challenging it is to craft an image that perfectly matches a specific vision. Nevertheless, the following picture conveys the atmosphere of the moment.
I hear hushed voices of men in many different languages in the background, blending, for me, into a piece of music.
Reflections on the Past: A Journey Through Time
I fall into a state of dreaming and let my mind wander. I am flooded with memories. It has been five years since I was grounded in Germany when countries closed their borders at the onset of COVID-19 and when my journey as the Traveling Actuary began.
I remember how quickly tools like Teams and Zoom scaled up at the beginning of the pandemic and how crucial the prompt transition from face-to-face meetings to virtual meetings was to continuing business operations. I think of how many times I heard the phrase, "You are on mute," over the last five years.
Virtual meetings during the pandemic had their own unique dynamics. They were tightly scheduled, often without breaks between them, stretching throughout the day and often evening. The focus was strictly on business, leaving little room for personal interactions. It felt as though a crucial fourth dimension was missing during the calls—lack of smell, vibes, people talking simultaneously, and the subtle nuances of human interaction. The calls were often attended by numerous people who were sometimes barely related to the topic to be discussed. It was an exhausting experience.
Returning to face-to-face meetings has been a breath of fresh air. The energy in the room, the ability to read body language, share a laugh, and engage in spontaneous conversations creates chemistry and a deeper connection among participants. It helps to solve problems more effectively. The informal exchanges before and after meetings, the encounters in hallways, and the shared coffee breaks contribute to stronger relationships, which are ultimately essential for successful teamwork.
I remember how the pandemic disrupted my way of documenting meetings. Exchanging business cards during meetings was a common practice before the pandemic. It made documenting visits straightforward, and new business cards were typically distributed following promotions. Naturally, there were no business cards exchanged during the virtual meetings held during the pandemic. Instead, participants introduced themselves briefly during the calls. These introductions were often quick to save time, sometimes barely understandable, and occasionally, the screen names of participants did not match their actual names. It was nearly impossible to keep track of who was on the call. Many people, unfortunately, no longer carried business cards as we returned to in-person meetings. It appears that many companies have stopped printing them. Keeping organized records of interactions and contacts has become harder for me.
Once I received an invitation to present at a webcast on lessons learned from the Covid-19 pandemic crisis. Have you seen “Miss Congeniality”? A movie in which an FBI agent, played by Sandra Bullock, enters a beauty contest to find out who the villain is in a plot in which the pageant contestants are at risk of getting harmed. Every contestant during a stage interview is asked their greatest wish, to which all contestants routinely reply, “world peace.” Only Sandra Bullock’s character gives a more elaborate reply, which causes confusion among the audience. Seeing the inquisitive glances and awkward silence from the audience, she adds “… and world peace.” which then triggers thunderous applause from the audience. I was reminded of this movie when I was asked during the webcast what the next crisis would be, to which I answered, “I would be a billionaire if I had the answer to this question.” Seeing the reaction from the panellists, I realized that this was my “… and world peace”-moment, and I quickly added “and climate change” is the most likely next crisis. I trust that I will never again be invited to a webcast.
And I also remember when I visited Kyoto during the time of travel restrictions for tourists in Japan. I went to Kinkaku-ji, the Golden Pavilion, and could take pictures without anyone obstructing the view. It allowed me to fully appreciate the beauty of the temple and its surroundings.
(Photo: Dirk Nieder)
Fast-forward to last year when I returned to Kinkaku-ji, and the contrast could not be more drastic. The place was crowded with tourists. I was struggling to find a spot just to catch a glimpse of the pavilion. The once quiet and empty streets of Kyoto were now filled with visitors from all over the globe, eager to experience the cultural treasures.
The Lasting Impact of COVID-19: Navigating the New Normal
As I leave the onsen and head back to my hotel, my thoughts drift to more recent developments.
The world has largely returned to pre-pandemic standards. The use of face masks, once seen by many as an infringement on civil rights, has largely been forgotten. I find myself in a minority when I continue to wear a mask, e.g., when I am in crowded places like the Tokyo subway. The mask protected me during the pandemic from catching even a single cold or a runny nose, and I hope for similar protection these days.
Despite the overall return to normalcy, certain aspects have yet to be fully restored. Public health is one of the most notable areas:
- The Swiss Re Institute found that excess mortality continues to persist and may potentially continue for the next decade. It estimates that excess mortality in the general population in 2023 was in the range of 3% – 7% for the United States. It forecasts that excess mortality may gradually tail off by 2033, to 0% – 3% in the United States. This may represent a potential challenge for Life and Health insurance, depending on how general population trends translate into the insured population.[4]
- Long COVID, which can be defined as health problems a person has long-term after recovering from a COVID-19 infection—such as fatigue, shortness of breath, headache—has affected millions of people worldwide.[5]
- COVID-19 has emerged as a significant new cause of disability: In 2023, Debeka, the fourth largest life insurer in Germany, for example, found that COVID-19 accounted for about 5.2% of the newly occurring disability cases, more than double compared to the previous year.[6]
Lessons Learned: Insights from the Journey
As we navigate the new normal, it is essential to reflect on the valuable lessons we have learned along the way.
The Importance of Robust and Future-Proof Definitions for Products with Rate Guarantees
When the pandemic began in 2020, Taiwan introduced a zero-COVID policy with strict border controls, quarantine and contact-tracing measures. Taiwan did not record a single local transmission of COVID-19 for a period of over 200 days in 2020 and was able to get an outbreak under control in 2021.
The restrictions imposed by the zero-COVID policy caused hardships for people. Taiwan insurers, in particular P&C insurers, introduced new products to compensate for these hardships. The products paid benefits in case of testing positive for COVID-19, or if the policyholder received a quarantine notice from the Taiwan government. A daily hospitalization benefit due to COVID-19 was paid as well.
While the products were priced and sold during the time of the Delta variant, their coverage ultimately extended into times when Omicron became prevalent. More than 5 million of such COVID-19 policies were sold to a population of 23 million. They generated more than USD 3 billion in claims in excess of premiums received because the products were priced with an incidence rate based on the Taiwan zero-COVID experience, but ultimately covered a period of COVID-coexistence policy.
Benefit triggers of products should hence be well-defined and any guarantees, even implicit, should be thoroughly analyzed. In case of the COVID-19 policies, the lethality of COVID-19 weakened dramatically during the, albeit short, policy duration, ultimately resulting in adverse selection. This learning can be extended to Critical Illness products, where guarantees can be found frequently, but diagnostic techniques may change over time.
Consider Regulatory Intervention
About 70% of the Japanes population owns some form of private health insurance. Such private insurance includes hospital cash policies, which have been developed as a supplement to life insurance and provide a daily cash benefit for each day of hospitalization. The benefit can, for example, help to cover additional costs not covered by the national health insurance.
A typical hospital cash policy requires that benefits are only provided “when medical treatment under the supervision of a doctor at a hospital is required.”
But many patients in Japan weren’t able to be hospitalized during the surge of COVID-19 due to the overwhelming number of COVID-19 infections. The insurance industry then adopted, at the request of the Japanese government, a flexible interpretation of hospitalization known as “deemed hospitalization.” This required insurance companies to pay benefits even if patients were not physically hospitalized but were receiving equivalent medical care at home. This measure was introduced to reduce the strain on the health care system by encouraging home quarantine. As the Omicron variant became prevalent and the number of severe cases decreased, insurers faced significant financial strain due to “deemed hospitalization.” The rules were finally adjusted in late 2022 to limit “deemed hospitalization” benefits to high-risk groups, such as the elderly, pregnant women, and those requiring medication.
The losses incurred by the life insurance industry in Japan were, for sure, not intended when the government requested companies to apply a flexible interpretation of policy wordings. It is, therefore, important to maintain transparent communication with the government and explain the potential long-term impacts of flexible policy interpretations on the insurance industry and policyholders. Insurers may also consider alternative solutions that involve limited risk but address the concerns of the government without compromising the original policy terms, such as creating special funds for pandemics.
The Protection Gap
Another significant lesson is the importance of addressing the protection gap—the difference between the total exposure to risk and the amount actually covered by insurance. The mortality protection gap, estimated at USD 83 trillion in 2019 in the Asia-Pacific,[7] exists in both developed and developing countries. While COVID-19 did not create new protection gaps, it brought existing ones into focus. The pandemic underscored the importance of having adequate insurance coverage and social safety nets to protect individuals and communities from the financial burden of health crises.
Life insurers should raise their awareness of life and health insurance risks in the aftermath of the COVID-19 pandemic. The life insurance industry should respond effectively to the evolving needs and heightened awareness among potential policyholders by offering accessible and well-tailored coverage options.
The Next Crisis Ahead
My addition of “climate change” is not facetious after all. As I continue walking back to my hotel through the rich snow of Yuzawa, I am reminded of the many other ski resorts that are experiencing a reduction in snow coverage, primarily as a result of warmer winters. Indeed, the climate crisis has emerged as one of the most pressing issues of our time, affecting every aspect of our lives. As global temperatures rise and extreme weather events become more frequent, the implications for insurance are profound and multifaceted.
Also, the life insurance industry is vulnerable to the effects of climate change. Heat and high temperatures are direct contributors to increases in heat-related mortality and morbidity. The 2003 heatwave in Europe, for example, caused an estimated 70,000 deaths. To put this into perspective, the common flu causes between 15,000 and 70,000 deaths each year in Europe.[8]
Climate change can also lead to the spread of infectious diseases. Warmer temperatures and changing precipitation patterns can expand the habitats of disease vectors like mosquitoes, leading to outbreaks of diseases such as malaria and dengue fever. The habitat of the Aedes Albopictus, also known as the (Asian) tiger mosquito, for example, is moving northward in Japan, increasing the risk of contracting dengue fever and Zika fever in Japan.[9]
But climate change also presents opportunities for innovation and adaptation. By understanding and addressing the risks associated with climate change, insurers can formulate risk management policies, stress-test their business against climate change scenarios, and ultimately encourage risk-averse behavior among policyholders. For example, researchers at Stanford and Colorado State University developed AI-powered tools that predict heat waves.[10] Insurers can make such tools available to their policyholders and encourage them to avoid outdoor exposure on days predicted to be very hot, or can alternatively build in heat stroke benefits in their policies.
Closing Chapter
As I arrive back at the hotel, I cannot help but have mixed feelings about the developments of the past few years. The COVID-19 pandemic claimed many lives, people faced immense hardship, loneliness during isolation was widespread, and many individuals had to pass away alone without the chance to say farewell to their families. Yet, it was also a time of remarkable solidarity, as society recognized and honored the efforts of medical workers and essential personnel who tirelessly served the public. And it showed the ingenuity of the human mind when the first vaccines were introduced and saved millions of lives.
Reflecting on these experiences, it is clear that while the pandemic brought unprecedented challenges, it also highlighted human resilience and compassion. As we move forward, whether it is navigating the lasting impact of COVID-19 or addressing the pressing issue of climate change, our collective efforts and shared experiences will guide us toward a better tomorrow.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.
Jing Lang,FSA, FCIA, FLMI, is the executive producer of Be Brilliant Media. She can be contacted at jing.lang@bebrilliant.ca.
Dirk Nieder, FSA, is regional director, Gen Re, Life/ Health South East Asia and Japan. He can be contacted at nieder@genre.com.
Endnotes
[1]https://www.soa.org/globalassets/assets/library/newsletters/reinsurance-section-news/2020/april/reinsurance-news-april-2020-niederlang
[2]https://www.soa.org/sections/reinsurance/reinsurance-newsletter/2021/march/rsn-2021-03-nieder/
[3] https://www.soa.org/globalassets/assets/library/newsletters/reinsurance-section-news/2020/may/rsn-05-2020-neider-lang.pdf
[4] Swiss Re Institute, The future of excess mortality after COVID-19, September 2024
[5]Nature Briefing, https://www.nature.com/articles/d41586-023-00114-0, Jan. 17, 2023
[6] Debeka, https://www.debeka.de/ueberuns/pressemeldungen/2024/gruende_berufsunfaehigkeit.html
[7] https://www.swissre.com/institute/research/topics-and-risk-dialogues/economy-and-insurance-outlook/asia-mortality-protection-gap-report.html
[8] Sarah Hogekamp, Actuarial Insights on Heat-Related Mortality and Morbidity: How Extreme Heat Affects Human Health, Reinsurance News, June 2024, https://www.soa.org/sections/reinsurance/reinsurance-newsletter/2024/june/rsn-2024-06-hogekamp/
[9] Wataru Hirose, Risk management for climate change and catastrophes in Asia, https://actuaries.org/IAA/Documents/SECTIONS/JointColloquium2022/Day1_AFIRERM_Hirose.pdf
[10] https://news.stanford.edu/stories/2024/08/using-ai-to-link-heat-waves-to-global-warming