INCREASING EPIDEMIC FREQUENCY
There’s mounting evidence that the rates of infectious disease outbreaks have been increasing in frequency over the past few years. Perhaps even in the past two decades.
From the period of the Spanish flu pandemic in 1918 to the HIV/AIDS epidemic around 1981, there were only six pandemics on record. Approximately one per decade.
However, since the SARS outbreak of 2002, there has been an increased frequency of outbreaks.
The records show that SARS was quickly followed by several recurring and new outbreaks. AVIAN flu, MARBURG virus, SWINE flu, MERS, and EBOLA to name a few.
COVID being the latest in the pattern of epidemics has grown into a pandemic.
The world has gone from dealing with one serious outbreak every decade to dealing with a serious outbreak every couple of years. There have been 10 major outbreaks between 2002 and 2020.
IGNORING THE EVIDENCE
Despite this growing trend, most companies didn’t consider epidemics a risk to their business.
The reason for this indifference to risk was simple. Pandemics that badly ravaged the world seemed isolated to the singular event of the Spanish flu. And this isolated event was about a century old.
Added to this was the fact that epidemic insurance had little precedent as a product. And it is very complex to model and calculate. Coverage for business interruption due to communicable diseases was not typically offered by traditional insurance policies.
However, the situation now is that COVID-19 has changed all that. Organizations must prepare more carefully now given the recent impact of the pandemic. Knowing the historical records of the Spanish flu makes it prudent to prepare even more mindfully.
SEEING THE TREND
Some insurers have taken notice of the increase in outbreaks of epidemics.
Munich RE is a global provider of reinsurance, primary insurance, and insurance-related risk solutions. They took note of the increased rate of epidemic and pandemic events and started responding to the data.
They decided to build a model that assesses epidemic risk. Building a model that allows for epidemic risk assessment is a very important part of developing insurance against that risk.
For this, they needed to have good data on infectious diseases over the past decades.
GIDEON DATA PAVES THE WAY TO A SUCCESSFUL MODEL
Munich RE employed GIDEON’s outbreak data in building its epidemic risk assessment model. It improved the accuracy and depth of their underlying data and the quality of their results.
Munich RE now offers Epidemic Risk Solutions to several industries including those that were hit the hardest by the COVID pandemic.
GIDEON’s data paved the way for accurate models to assess risk and provide insurance coverage in the event of business interruption as a result of an epidemic.
This allows insurers to close a significant coverage gap that traditional insurance doesn’t.
With GIDEON’s disease outbreak data, insurers can make companies more resilient against business interruption due to an epidemic or pandemic.
Companies have a stronger outlook now as epidemic and pandemic insurance has become a reality.