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Pandemic History and Financial Implications: Focus on Flu Epidemics ERM Session 32/CS 4E PowerPoint Presentation
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Pandemic History and Financial Implications: Focus on Flu Epidemics ERM Session 32/CS 4E April 27, 2004 Max J. Rudolph, FSA CFA MAAA Vice President & Actuary Mutual of Omaha. 1918 Perspective. Babe Ruth was a Boston Red Sox pitcher WWI offensives Liberty Loan bond drives meetings/rallies

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Pandemic History and Financial Implications: Focus on Flu Epidemics

ERM Session 32/CS 4E

April 27, 2004

Max J. Rudolph, FSA CFA MAAA

Vice President & Actuary

Mutual of Omaha

1918 perspective
1918 Perspective
  • Babe Ruth was a Boston Red Sox pitcher
  • WWI offensives
  • Liberty Loan bond drives
    • meetings/rallies
    • door-to-door solicitations
    • politicians overrode health inspectors
      • recall China’s response to SARS
  • Some thought flu was sent by the Germans - germ warfare
why not more well known
Why not more well known
  • No politically famous person died
    • who is famous before 40?
    • FDR (36) got sick (asst. secretary of Navy)
    • Woodrow Wilson sick at Paris Peace Conference
      • Willard Straight (38) died - 3 columns in NY Times
    • Pershing got sick
  • Time
    • 86 years ago
    • Flu is common today
    • You don’t die from it
pandemics
Pandemics
  • 1900 before large cities were self supporting without immigrants
  • Wars help to spread epidemics
    • travel, crowded conditions
  • Often bipolar reactions
    • hide
    • party
  • Eventually clean water
  • Epidemics localized, pandemics worldwide
influenza
Influenza
  • Originally believed to be human disease
  • Swine flu decimated pig populations (new disease?) in fall of 1918
    • many farmers caught it too
    • flu appears to have crossed species
    • avian flu in 1918 (recent discovery)
  • Horse flu might be early warning of human flu
spanish flu
Spanish flu
  • Worldwide impact
  • Airborne disease
  • Did not originate in Spain
    • many signs point to Kansas as source
  • First wave took 4 months to cover globe
  • Continually mutated
    • how does flu travel so fast?
characteristics of 1918 flu
Characteristics of 1918 Flu
  • Moved fast
  • Arrived, flourished and was gone
  • Limited impact on the economy
  • High morbidity, low mortality
    • versus rabies (low morbidity, high mortality)
symptoms
Symptoms
  • Very sudden - 1-2 hours healthy to prostrate
  • Fevers: 101-105 degrees
  • General weakness
  • Eyes burn
  • Severe aches in muscles, joints, backs, heads
  • As if they had “been beaten all over by a club”
  • High fever caused hair to fall out for survivors
death
Death
  • Face turns a dark brownish purple
  • Cough up blood
  • Feet turn black
  • Gasp for breath
  • Blood-tinged saliva
  • Drown
    • lungs fill with reddish fluid
first wave
First Wave
  • Mild in spring/summer 1918 - normal flu
  • Very contagious - hit young, healthy adults
  • Not in Africa, South America, Canada
  • Planted seeds of flu
second wave
Second Wave
  • Late summer/fall 1918 - deadly
  • Outcome
    • Mild (20%)
    • drowned quickly
    • developed pneumonia
  • Pfeiffer’s bacillus
    • trigger?
and you were there
…and You Were There
  • Entire families were wiped out
    • pregnant women especially vulnerable
  • Ads for life insurance encouraged sales
  • Undertakers stopped accepting business since so many had not been able to pay
  • Masks did not help (chewing tobacco?)
  • Influenza and dysentery often went together
    • intestinal flu?
abnormal mortality curve
Abnormal Mortality Curve
  • W shaped curve
    • peak for babies/toddlers under 5
    • peak for ages 20-40
    • peak for elderly ages 70-74
  • Focus on healthy doughboys
revelations
Revelations
  • First the world was to be struck by war, then famine, and then, with the breaking of the fourth seal of the scroll foretelling the future, the appearance of a horse, “deathly pale, and its rider was called Plague, and Hades followed at its heels.”
viral diseases
Viral Diseases
  • Untreatable still today
  • Influenza basics
    • 8 genes made of RNA
      • die within hours without cells to infect
    • shape: balls, oval, long filaments
    • wrapped in slippery fatty membrane
    • held in place by a protein scaffolding
    • in and out of cells using sharp protein shards
    • lungs are only human cells with the right enzyme
proteins
Proteins
  • Hemagglutinin (H)
    • makes red blood cells clump
    • helps flu to enter cell
  • Neuraminidase (N)
    • helps flu spread from cell
  • Interferon
    • natural antibiotic
    • created by white blood cells
    • prevents virus replication
the numbers
The Numbers
  • 20-28% contracted flu and 20-100 million died worldwide
  • 40% of US Navy contracted flu in 1918
    • 36% of Army
  • 25% morbidity in US, 2.5% mortality
    • .25 * .025 = .6%
  • 500,000 died in US (population is 3 times larger today)
    • average life span dropped by 12 years (51/39)
    • More US deaths than all 20th century combat deaths
remote areas
Remote Areas
  • Tahiti
    • Over half the population contracted flu
    • over 10% died within a month of ship’s docking
  • Western Samoa - 20% died
  • American Samoa - governor quarantined boats with flu - limited impact
  • Some Alaskan villages were wiped out by the visiting postman
  • India
types of flu
Types of Flu
  • 1918/76/77/86/88 flu H1N1 - Spanish flu
  • 1956 flu H2N2 - Asian flu
  • 1968/93 flu H3N2 - Hong Kong flu
  • 1995 H7N7
  • 1997 H5N1 - Chicken flu
  • 1999 H9N2
reconstructed virus
Reconstructed Virus
  • Armed Forces Institute of Pathology
    • autopsy sliced lung and stored in formaldehyde and paraffin wax (thumbnail sized)
    • Dr. Jeffrey Taubenberger
  • Alaska
    • bodies buried in permanently frozen ground
    • Johan Hultin (University of Iowa)
immunizations
Immunizations
  • When should a nation require immunizations?
    • 1976 swine flu scare
    • crying wolf?
flu pandemics cyclical
Flu pandemics - cyclical?
  • 1889-90
  • 1918-19
    • antibodies from 1889?
  • 1957 Asian flu
    • antibodies already present in those alive in 1918
  • 1968 Hong Kong flu
  • Like an earthquake?
    • do the odds increase as the years between pandemics increases?
  • Does swine mix avian/human flu and create a pandemic periodically?
the next flu will be mild
The next flu will be mild
  • Virus dies quickly in high humidity
  • Better health teams
  • Germ theory allows response
  • 1918 was wartime
the next flu will be severe
The next flu will be severe
  • Travel
  • Limited immunity of population
    • it has been a long time since last pandemic
  • Politics
  • Shortage of beds
  • Higher urban population
impact on actuarial science
Impact on Actuarial Science
  • “The year 1918 was an actuarial nightmare: the flu and pneumonia death rate of life insurance policy holders over 45 and 50, for whose deaths the insurance companies were at least partly prepared, did, of course, rise, but only slightly as compared to the rate of young adults, whose deaths in great numbers no insurance company anticipated.” Crosby pg 215 quoting other sources
impact on insurers
Impact on Insurers
  • US insurers – 37 of 48 omitted/reduced dividend
  • Equitable - death claims in one week 745% of prior year
  • Met Life – Oct 1918-June 1919
    • additional $24 million in claims
    • started funding flu research
henry moir president of actuarial society of america
Henry Moir – President of Actuarial Society of America
  • End of 1918 (before pandemic’s second wave)
  • 400,000 deaths
  • Average age 33 (norm 55-60)
  • Years lost per victim – 25 years
  • 10 million years lost
i had a little bird and its name was enza i opened the window and in flew enza
I had a little bird

And its name was Enza.

I opened the window

And in-flew-Enza.

bibliography
Bibliography
  • America’s Forgotten Pandemic
    • Alfred W. Crosby
  • Flu: The Story of the Great Influenza Pandemic
    • Gina Kolata
  • The Great Influenza: The Epic Story of the Greatest Pandemic in History
    • John M. Barry