(Bloomberg) -- An unusual spike in deaths among middle-aged Britons could hit profits at insurers Aviva Plc and Legal & General Group Plc, according to a Bloomberg Intelligence report.

The mortality rate for 40- to 44-year-olds worsened the most in the first half of 2023, analysis of Office for National Statistics data showed. The number of age-standardized deaths per 100,000 rose 6% in the same period, following two years of declines. 

This marks a potential turning point for the age-standardized mortality measure, which has been steadily improving since the 1990s. BI analysts wrote they expected the new trend to be sustained for the full year, though the underlying reasons for the change were unclear. 

A paper in the Lancet medical journal last month suggested the effects of Covid-19 infections, along with pressures on the National Health Service in both acute illness and chronic disease management, could be among the reasons - though the authors added that it’s too soon to be sure, and the trend is also seen in many other countries. 

While the UK’s aging and growing population means some rise in the death rate is expected, the recent increase is unusual enough to have prompted debates in parliament about the possible causes.

Insurers’ pensions and other savings products act as a natural hedge against long-term changes in mortality patterns, yet the rise in deaths for the 40- to 44-year-old cohort, if sustained, would impact the pricing of all life and insurance products, according to BI.

“If this develops into a trend, it could reduce term-assurance profit at market leaders Legal & General and Aviva,” BI analysts Kevin Ryan and Juliet Abiola said. “This is potentially significant because of the decline in the absolute number of deaths.”

(Updates to add data on excess deaths from the fourth paragraph.)

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