National Association of Insurance Commissioners on Pandemics
Issue: According to the Centers for Disease Control and Prevention (CDC), a pandemic is the sudden outbreak of an infectious disease spread over several countries or continents, affecting many people. Pandemics have the potential to affect all industries and could potentially affect insurers' operations and various lines of business across all insurance sectors. Pandemics can also disrupt financial markets, potentially impacting insurers' investments. However, unlike losses from weather-related catastrophes, losses from pandemics do not come from destruction of physical structures.
Pandemic Trends: Pandemics have been well-documented for centuries. Some of the most devastating pandemics have been the bubonic plague in the 14th century, the measles in the 16th century and smallpox in the 18th century. The 19th century witnessed tuberculosis, cholera, influenza and polio pandemics. The 20th century saw the influenza A (H1N1) pandemic and the acquired immune deficiency syndrome (AIDS) pandemic.
Recent epidemics such as Coronavirus, Zika, and Ebola have heightened awareness of the pandemic threat. However, influenza pandemics have historically been the most prevalent pandemic threat, with about three occurring every century. Compared to seasonal flu viruses, pandemic flu can cause severe disease in young, healthy people, resulting in more illness and deaths. For instance, the highest mortality rate in the 1918–1919 Spanish Flu pandemic was in people aged 20–40 years. Children were the most affected in the 2009 H1N1 pandemic.
Managing the Industry Impact of Pandemic Risk: Pandemics could have serious consequences for insurers. Investing in pandemic preparedness and risk management is essential to mitigate operating difficulties and expected losses during a pandemic. Below are some of the ways insurers can address their vulnerabilities to pandemic risk.
Read more: https://content.naic.org/cipr_topics/topic_pandemics.htm
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