1 / 10

Avian Influenza-H5N1 Implications for the Insurance Industry Casualty Actuarial Society Meeting San Francisco Al Fine -

Avian Influenza-H5N1 Implications for the Insurance Industry Casualty Actuarial Society Meeting San Francisco Al Fine - Willis Risk Solutions. Facts. Influenza viruses are highly species specific Avian influenza is an infectious disease caused by the “A” strain of the virus

magdalene
Download Presentation

Avian Influenza-H5N1 Implications for the Insurance Industry Casualty Actuarial Society Meeting San Francisco Al Fine -

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Avian Influenza-H5N1Implications for the Insurance Industry Casualty Actuarial Society MeetingSan FranciscoAl Fine - Willis Risk Solutions

  2. Facts • Influenza viruses are highly species specific • Avian influenza is an infectious disease caused by the “A” strain of the virus • Since 1959 only 10 documented incidences where an “A” strain influenza has infected humans • H5N1 is highly pathogenic virus transmitted by migrating birds to farm poultry; humans infected tend to work with or ingest sick poultry • Disease spread via intersecting migratory flyways and international human and product movement • A major pandemic is likely when disease mutates to allow efficient transmission between humans-at least one case has been identified

  3. History • 1997 Hong Kong Outbreak –first known cases of bird to human transmission; 2003-2005 period defined as the “Second Wave” • According to WHO, in 2006 H5N1has killed a person every four days- double the 2005 rate • As of October 18, 2006: • 256 Diagnosed Cases • 151 Deaths • 50+ Cases in Indonesia in 2006 • 90+Cases in Viet Nam • Cases in 10 countries located in Southeast Asia, Central Asia, Europe, and the Middle East

  4. Scenarios Congressional Budget Office Assessment • Severe: US Exposure- 90 Million Cases/2 Million Deaths • Mild: US Exposure- 75 Million Cases/100K Deaths Fitch • 400 K Deaths Projected in Europe • 209 K Deaths Projected in US Y2K or 9/11? • Potentially 25% of the Workforce Infected on Global Basis • Broken Supply Chains/Border Closings

  5. Risk Factors • Population density and demographic of infected population • Speed of Infection and ability to quarantine • Availability of cure and logistical, political and financial impediments affecting distribution • Duration of disease and lingering economic and social effects of countermeasures

  6. Insurance Exposures Employee Benefits • Health and Welfare • Life Property/Business Interruption/Political Risk • Contamination • Civil Authority • Supply Chain General Liability • Premises Liability • Strict Liability in Tort • Independent Contractors Workers’ Compensation/Employers’ Liability • Sole Remedy? • Number of Occurrences • Foreign Voluntary Compensation

  7. Implications for Insurers and Reinsurers • Exclusionary Language to Remove Ambiguity • Coverage Definition and Rationing • Arguments for Coverage Based On Public Policy Concerns • Emergence of Potential New Case Law

  8. Possible Financial Implications • Loss impact uncertain • WC/GL flu-related claims up • WC/GL non-flu-related claims down as businesses shrink or close • Economy Suffers • Revenues & Payroll down  Premiums down • Stocks & Bonds lower  Assets down  Less money to pay claims Predicted 2% - 5% hit to assets on $4 trillion in assets = $80 billion - $200 billion or 30% to 80% of surplus • Investment Downgrades for Insurers- combination of underwriting losses and portfolio losses

  9. New Opportunities? • Contingent Business Interruption • Example: • ABC Co. performs accounting services for private schools on an outsource basis • Avian flu  Excessive Absenteeism (Teachers & Students)  School Closures  Reduced Income to ABC Co.  Need for Contingent Business Interruption coverage • Could possibly be done w/parametric trigger (e.g. pay $100,000 if U.S. incidences exceed 50,000) to make loss quantification easier

  10. H5N1 Data Tracker • World Health Organization: http://www.who.int/csr/disease/avian_influenza/en/index.html • UN Food and Agricultural Organization: http://www.fao.org/ag/againfo/subjects/en/health/diseases-cards/special_avian.html • US Center for Disease Control: http://www.cdc.gov/flu/avian

More Related