The Society of Actuaries is researching the implications of an avian flu pandemic on the insurance industry (see here). Tom Edwalds, Chairperson of the SOA’s oversight committee for this research, believes
The possible effects of pandemic influenza are important to the U.S. life and health insurance industry because it may increase the severity and frequency of the payment of death benefits and medical treatment compared to anticipated, potentially affecting an insurer’s or reinsurer’s solvency.
Jim Toole, fellow of the Society of Actuaries and managing director of MBA Actuaries, will undertake the effort, and said:
Advance planning is critical. An insurer needs to do more than just study how a pandemic might affect the amount and timing of claim dollars it pays to its policyholders. It will also need to consider how it will function at unprecedented claim volumes, when as many as 50 percent of its employees are ill or absent providing care for family members. The research will assess the total risk to an insurer, discussing vital considerations for before, during and after an event that might mitigate or exacerbate the consequences of a severe or moderate pandemic
According to background information on the study and a call for proposals, the purposes are (see here):
- To create reference material to educate actuaries and other risk management professionals on North American mortality and morbidity risks of pandemic influenza
- To provide information on the economic consequences of a pandemic influenza event in North America and to analyze the implications for the life insurance industry
Research results will be summarized into a report suitable for publication by the Society of Actuaries.
Two items that appears to be missing:
- What will be the impact on the property/casualty business?
- How should insurance organizations plan to operate in a wide-spread quarantine?
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