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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