Insurance risk model says 20% chance of a pandemic worse than 1918
May 03, 2006
A leading risk modeling company has completed a probabilistic model which indicates the 1918 Spanish Flu pandemic was not a worst case. In fact, the model developed by Risk Management Solutions (RMS) suggests there's a one in five chance we could see a pandemic more severe than 1918.
The RMS model incorporated more than 1,800 pandemic influenza scenarios, taking into account factors such as:
- likelihood of the pandemic occurring
- infectiousness and lethality of the pandemic
- demographic impact
- country of outbreak
- vaccine production
- national countermeasures
The model expressly incorporated information about the current influenza A (H5N1) bird flu.
RMS believes that many companies may be underestimating their risk if they assume that the 1918 pandemic is the worst-case scenario.
The RMS Influenza Pandemic Risk Model is intended to help insurers assess the losses they will experience from pandemics. Unlike other pandemic influenza scenarios which have been publicized, the RMS model quantifies not only the severity of the event, but also the likelihood of the event occurring. RMS says "likelihood" is a necessary component of effective risk management.
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Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy (CIDRAP), recently indicated he is open to the possibility of a worse-than-1918 pandemic:
...when people talk about 1918 as a worst-case scenario, well, maybe that isn't the worst-case scenario. That's hard for people to hear, because then they think you're really trying to scare the hell out of people. But you know what? It's just the data.If this virus were to ultimately go human-to-human, none of us know what the human mortality would be.