Repeat of flu outbreak of 1918 could cost up to 10 % of global production and over 2 trillion Euros [View All]

[RB TexLa]

October 22, 2008
Insurer: Flu Outbreak Could Cause Global Recession
A repeat of the Spanish flu outbreak of 1918 is expected to cause a global recession on a scope ranging from 1 to 10 percent of global gross domestic product, according to a report released October 17 by Lloyd’s of London’s emerging risk team.

The Lloyd’s report, “Pandemic—Potential Insurance Impacts,” concludes that a pandemic is inevitable, with historic recurrence rates of 30 to 50 years. The report focuses on the impact of a global pandemic on the business community and, in particular, the insurance markets.

The impact on some classes of insurance business, namely life and health, would be adverse, Lloyd’s finds. Many forms of liability covers, including general liability, directors and officers, medical malpractice, as well as products offering business interruption and event cancellation could be triggered, the report states.


http://www.workforce.com/section/00/article/25/85/77.php

Flu Pandemic May Cost World Economy Up to $3 Trillion (Update3)

By Jason Gale

Oct. 17 (Bloomberg) -- A flu pandemic could kill 71 million people worldwide and push the global economy into a ``major global recession'' costing more than $3 trillion, according to raised estimates by the World Bank of a worst-case scenario.

A slump in tourism, transportation and retail sales, as well as workplace absenteeism and lower productivity caused by a ``severe'' outbreak, may cut global gross domestic product by 4.8 percent, the Washington-based bank said in an internal report updated last month and obtained by Bloomberg News today. Economic modeling by the bank in June 2006 estimated GDP would drop by 3.1 percent, or about $2 trillion.

The spread of the H5N1 avian-influenza strain across Asia, Africa and Europe prompted the development of vaccines and the slaughter of poultry from Indonesia to the U.K. Measures to avoid infection would generate most of the costs, said the report, which used simulations to underline the importance of global preparations for a pandemic sparked by bird flu. Human cases of H5N1 infection have fallen by half this year as controls of outbreaks in poultry improve.

``Even with such efforts, an eventual human pandemic at some unknown point in the future is virtually inevitable,'' Andrew Burns, Dominique van der Mensbrugghe and Hans Timmer, economists at the bank, wrote in the report.

Pandemic Threat

The threat of a flu pandemic, raised by the World Health Organization in 2003, persists because the H5N1 virus is entrenched in parts of Asia and Africa, the World Bank said. Such a contagion would start when a novel influenza A-type virus, to which almost no one has natural immunity, emerges and begins spreading. Experts believe that the so-called 1918 Spanish Flu pandemic, which may have killed as many as 50 million people, began when an avian flu virus jumped to people.

http://www.bloomberg.com/apps/news?pid=20601082&sid=ashmCPWATNwU&refer=canada