FSCS - How much of *everyone's* cash can they insure

tranquility1

Nebulous2 said:

tranquility1 said:

Sea_Shell said:

Malthusian said:

If everyone insured by life insurance providers died, the insurers wouldn't be able to cover close to 1% of the sum they've committed to paying. That doesn't matter either and they can't even print money.

In the event of an economic meltdown nobody will care whether the FSCS can pay out enough worthless money to meet everyone's deposits or not, because the economy will have melted down.

In the event of a bog-standard collapse of a major bank, like those in 2008, either the FSCS will pay out or, as wmb194 said, it won't even get that far. The #1 priority of the government will be to ensure that depositors don't start queuing round the block en masse to withdraw their cash and stuff it under the floorboards, as that would turn a bog-standard banking crisis into economic meltdown.

That made me wonder if the life insurance providers have been adversely affected by the excess deaths figures caused by Covid?   It's not made "the news" so it seems not to have.

How bad would the death rate have to have been, amongst the "insured" for it to really start to bite the industry.

Were there actually excess deaths overall though?  And with an average age of 82, I doubt the families of those insured would have received much money.

Yes there were excess deaths overall. The most since the war. This only gives figures until November or so and doesn't cover the further wave early this year. 

https://www.bbc.co.uk/news/uk-556316930

Edited to add - Here's the full data set for England and Wales in 2020 from the ONS 

Excess deaths in England and Wales, 2020: Final - Office for National Statistics (ons.gov.uk)

Table 3 shows age related breakdowns.  

13.1% excess deaths in 50-54 age group (1672 extra deaths) 
19.0% excess deaths in 55-59 age group (3331 extra deaths)

The average age might be 82, but it reached much further than that. 

Those figures aren't adjusted for population growth. When adjusted accordingly, the excess deaths look at lot different.

Nebulous2

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Sea_Shell said:

Malthusian said:

If everyone insured by life insurance providers died, the insurers wouldn't be able to cover close to 1% of the sum they've committed to paying. That doesn't matter either and they can't even print money.

In the event of an economic meltdown nobody will care whether the FSCS can pay out enough worthless money to meet everyone's deposits or not, because the economy will have melted down.

In the event of a bog-standard collapse of a major bank, like those in 2008, either the FSCS will pay out or, as wmb194 said, it won't even get that far. The #1 priority of the government will be to ensure that depositors don't start queuing round the block en masse to withdraw their cash and stuff it under the floorboards, as that would turn a bog-standard banking crisis into economic meltdown.

That made me wonder if the life insurance providers have been adversely affected by the excess deaths figures caused by Covid?   It's not made "the news" so it seems not to have.

How bad would the death rate have to have been, amongst the "insured" for it to really start to bite the industry.

Were there actually excess deaths overall though?  And with an average age of 82, I doubt the families of those insured would have received much money.

Yes there were excess deaths overall. The most since the war. This only gives figures until November or so and doesn't cover the further wave early this year. 

https://www.bbc.co.uk/news/uk-556316930

Edited to add - Here's the full data set for England and Wales in 2020 from the ONS 

Excess deaths in England and Wales, 2020: Final - Office for National Statistics (ons.gov.uk)

Table 3 shows age related breakdowns.  

13.1% excess deaths in 50-54 age group (1672 extra deaths) 
19.0% excess deaths in 55-59 age group (3331 extra deaths)

The average age might be 82, but it reached much further than that. 

Those figures aren't adjusted for population growth. When adjusted accordingly, the excess deaths look at lot different.

Which figures are you talking about? 


There has been very limited population growth in 2020 compared with the 5 reference years of 2014 to 2019 in the ONS figures. 

The ONS say:- 

"An alternative method would be to compare rates, however due to the population of England and Wales changing by less than 1% each year, there is little difference in excess deaths based on death counts versus rates." 

A sub 1% population growth doesn't make 19% excess deaths look 'a lot different.' 

tranquility1

Nebulous2 said:

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Sea_Shell said:

Malthusian said:

If everyone insured by life insurance providers died, the insurers wouldn't be able to cover close to 1% of the sum they've committed to paying. That doesn't matter either and they can't even print money.

In the event of an economic meltdown nobody will care whether the FSCS can pay out enough worthless money to meet everyone's deposits or not, because the economy will have melted down.

In the event of a bog-standard collapse of a major bank, like those in 2008, either the FSCS will pay out or, as wmb194 said, it won't even get that far. The #1 priority of the government will be to ensure that depositors don't start queuing round the block en masse to withdraw their cash and stuff it under the floorboards, as that would turn a bog-standard banking crisis into economic meltdown.

That made me wonder if the life insurance providers have been adversely affected by the excess deaths figures caused by Covid?   It's not made "the news" so it seems not to have.

How bad would the death rate have to have been, amongst the "insured" for it to really start to bite the industry.

Were there actually excess deaths overall though?  And with an average age of 82, I doubt the families of those insured would have received much money.

Yes there were excess deaths overall. The most since the war. This only gives figures until November or so and doesn't cover the further wave early this year. 

https://www.bbc.co.uk/news/uk-556316930

Edited to add - Here's the full data set for England and Wales in 2020 from the ONS 

Excess deaths in England and Wales, 2020: Final - Office for National Statistics (ons.gov.uk)

Table 3 shows age related breakdowns.  

13.1% excess deaths in 50-54 age group (1672 extra deaths) 
19.0% excess deaths in 55-59 age group (3331 extra deaths)

The average age might be 82, but it reached much further than that. 

Those figures aren't adjusted for population growth. When adjusted accordingly, the excess deaths look at lot different.

Which figures are you talking about? 


There has been very limited population growth in 2020 compared with the 5 reference years of 2014 to 2019 in the ONS figures. 

The ONS say:- 

"An alternative method would be to compare rates, however due to the population of England and Wales changing by less than 1% each year, there is little difference in excess deaths based on death counts versus rates." 

A sub 1% population growth doesn't make 19% excess deaths look 'a lot different.' 

Since 2014, the UK's population has increased by 2,784,069 people.

That's an increase of more than 4% and it is significant when comparing numbers of deaths year by year.

grumiofoundation

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Sea_Shell said:

Malthusian said:

If everyone insured by life insurance providers died, the insurers wouldn't be able to cover close to 1% of the sum they've committed to paying. That doesn't matter either and they can't even print money.

In the event of an economic meltdown nobody will care whether the FSCS can pay out enough worthless money to meet everyone's deposits or not, because the economy will have melted down.

In the event of a bog-standard collapse of a major bank, like those in 2008, either the FSCS will pay out or, as wmb194 said, it won't even get that far. The #1 priority of the government will be to ensure that depositors don't start queuing round the block en masse to withdraw their cash and stuff it under the floorboards, as that would turn a bog-standard banking crisis into economic meltdown.

That made me wonder if the life insurance providers have been adversely affected by the excess deaths figures caused by Covid?   It's not made "the news" so it seems not to have.

How bad would the death rate have to have been, amongst the "insured" for it to really start to bite the industry.

Were there actually excess deaths overall though?  And with an average age of 82, I doubt the families of those insured would have received much money.

Yes there were excess deaths overall. The most since the war. This only gives figures until November or so and doesn't cover the further wave early this year. 

https://www.bbc.co.uk/news/uk-556316930

Edited to add - Here's the full data set for England and Wales in 2020 from the ONS 

Excess deaths in England and Wales, 2020: Final - Office for National Statistics (ons.gov.uk)

Table 3 shows age related breakdowns.  

13.1% excess deaths in 50-54 age group (1672 extra deaths) 
19.0% excess deaths in 55-59 age group (3331 extra deaths)

The average age might be 82, but it reached much further than that. 

Those figures aren't adjusted for population growth. When adjusted accordingly, the excess deaths look at lot different.

Which figures are you talking about? 


There has been very limited population growth in 2020 compared with the 5 reference years of 2014 to 2019 in the ONS figures. 

The ONS say:- 

"An alternative method would be to compare rates, however due to the population of England and Wales changing by less than 1% each year, there is little difference in excess deaths based on death counts versus rates." 

A sub 1% population growth doesn't make 19% excess deaths look 'a lot different.' 

Since 2014, the UK's population has increased by 2,784,069 people.

That's an increase of more than 4% and it is significant when comparing numbers of deaths year by year.

4% over 5 years is less than 1% a year as was said in the post you replied to.  (4/5 = 0.8)

As you appear to have a very good understanding of statistics I am therefore of course very confident you have tested for significance. 


Not really sure how it impacts FSCS protection anyway but since you started the thread don't feel too bad for aiding it's continuous veer off topic.  

Nebulous2

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Nebulous2 said:

tranquility1 said:

Sea_Shell said:

Malthusian said:

If everyone insured by life insurance providers died, the insurers wouldn't be able to cover close to 1% of the sum they've committed to paying. That doesn't matter either and they can't even print money.

In the event of an economic meltdown nobody will care whether the FSCS can pay out enough worthless money to meet everyone's deposits or not, because the economy will have melted down.

In the event of a bog-standard collapse of a major bank, like those in 2008, either the FSCS will pay out or, as wmb194 said, it won't even get that far. The #1 priority of the government will be to ensure that depositors don't start queuing round the block en masse to withdraw their cash and stuff it under the floorboards, as that would turn a bog-standard banking crisis into economic meltdown.

That made me wonder if the life insurance providers have been adversely affected by the excess deaths figures caused by Covid?   It's not made "the news" so it seems not to have.

How bad would the death rate have to have been, amongst the "insured" for it to really start to bite the industry.

Were there actually excess deaths overall though?  And with an average age of 82, I doubt the families of those insured would have received much money.

Yes there were excess deaths overall. The most since the war. This only gives figures until November or so and doesn't cover the further wave early this year. 

https://www.bbc.co.uk/news/uk-556316930

Edited to add - Here's the full data set for England and Wales in 2020 from the ONS 

Excess deaths in England and Wales, 2020: Final - Office for National Statistics (ons.gov.uk)

Table 3 shows age related breakdowns.  

13.1% excess deaths in 50-54 age group (1672 extra deaths) 
19.0% excess deaths in 55-59 age group (3331 extra deaths)

The average age might be 82, but it reached much further than that. 

Those figures aren't adjusted for population growth. When adjusted accordingly, the excess deaths look at lot different.

Which figures are you talking about? 


There has been very limited population growth in 2020 compared with the 5 reference years of 2014 to 2019 in the ONS figures. 

The ONS say:- 

"An alternative method would be to compare rates, however due to the population of England and Wales changing by less than 1% each year, there is little difference in excess deaths based on death counts versus rates." 

A sub 1% population growth doesn't make 19% excess deaths look 'a lot different.' 

Since 2014, the UK's population has increased by 2,784,069 people.

That's an increase of more than 4% and it is significant when comparing numbers of deaths year by year.

A 4% increase in population would lead to a 4% increase in deaths, not a 19% one as in the 55-59 age group. 

However they aren't comparing deaths year by year. They are comparing an average of 2014-2019 with 2020. 

We aren't talking about the UK either, we are discussing England and Wales. 

The increase in excess deaths due to Coronavirus, whether you argue around the margins, is still the most significant increase in excess deaths since the war, and impacted a lot of the population, not just the over- 80s. 

Anyway to come back to FSCS protection. The theory is that simply having it in place means it is unlikely to be needed. One of, if not the biggest concern in banking, is a run on the bank. People are not likely to form a queue around the block to get their money out if they know the government will protect them.