Model captures the excess morbidity, mortality, and insurance losses caused by pandemic flu
AIR has released its pandemic flu model to capture the excess morbidity, mortality, and insurance losses caused by pandemic influenza.
The model includes more than 18,000 simulated events, ranging in severity from mild to severe, that can start and spread anywhere in the world and last from months to years. This new model builds upon AIR’s existing mortality modelling capabilities.
“Pandemics are low-frequency events with a potentially high level of severity and impact to insurers and reinsurers in the areas of life, health, and disability,” said AIR senior scientist Nita Madhav.
“Other lines such as workers compensation, personal accident, and business interruption may also incur significant losses, depending on policy specifics. This is the first AIR model to estimate losses due to infectious disease risk, and we’re confident that the pandemic flu model will provide clients with a more robust understanding of the risk and advanced capabilities for managing it.”
In developing the model, AIR created an exposure database that includes worldwide population data, age distributions, sex ratios, and pre-existing health conditions, all of which can mitigate or exacerbate a pandemic.
“The 1918 Spanish flu pandemic was one of the largest public health catastrophes of the past century, causing life insurance losses of almost $100m, which is comparable almost $20bn today,” continued Madhav. “Insurers striving to manage pandemic risk need to know that a modern-day pandemic on par with the Spanish flu of 1918 could occur.”