A repeat of the Spanish flu outbreak of 1918 is expected to cause a global recession on a scope ranging from 1 to 10 percent of global gross domestic product, according to a report released October 17 by Lloyd’s of London’s emerging risk team.
The Lloyd’s report, “Pandemic—Potential Insurance Impacts,” concludes that a pandemic is inevitable, with historic recurrence rates of 30 to 50 years. The report focuses on the impact of a global pandemic on the business community and, in particular, the insurance markets.
The impact on some classes of insurance business, namely life and health, would be adverse, Lloyd’s finds. Many forms of liability covers, including general liability, directors and officers, medical malpractice, as well as products offering business interruption and event cancellation could be triggered, the report states.
“The significant message is that society should not optimize to one particular scenario as a worst case,” said Trevor Maynard, manager, emerging risks at Lloyd’s and the report’s author.
“Much has been said of the 1918 Spanish flu epidemic, which is said to have killed up to 100 million people worldwide. While Avian flu is seen as the most likely next pandemic, we have to ensure we are prepared for other types of pandemics that may require different responses and pose different challenges—some of which may well have higher rates of mortality than flu,” he said in a statement.
The full report can be read here.
Filed by Richard Miller of Business Insurance Europe, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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