By Fisayo Olusegun
Increasing epidemic frequency
There’s mounting evidence that the rates of infectious disease outbreaks have been increasing in frequency over the past few 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.
A new type of insurance
As COVID-19 shook up the world’s economy and introduced new norms to human interaction, companies now have a stronger outlook on business risks posed by infectious diseases.
Some insurers have taken notice of the increase in outbreaks of epidemics ahead of COVID-19.
Munich Re is one such example. They took note of the increased rate of epidemic and pandemic events and started responding to the data.
Using GIDEON’s historical outbreak data, the company built an epidemic risk assessment model, which is a very important part of developing insurance against that risk.
Munich RE now offers Epidemic Risk Solutions to several industries including those that were hit the hardest by the COVID pandemic. And they are not the only company seeing a surge in demand for epidemic insurance!
Read the Munich Re case study here
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Originally published at gideononline.com
