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What is Infectious Disease Risk?
Infectious diseases are the leading cause of death
worldwide, accounting for a quarter to a third of all mortality. In most
industrialized countries, infectious disease ranks after cancer and
heart disease as a primary cause of mortality. Despite developments in
pharmaceuticals, infectious disease rates are rising due to changes in
human behavior, larger and denser cities, increased trade and travel,
inappropriate use of antibiotic drugs, and the appearance of new and
re-emerging pathogens.
Twenty known diseases have recently re-emerged or spread geographically.
These new outbreaks are of more virulent and drug-resistant forms. At
least 30 unknown disease agents for which no cures are available have
been identified in human populations in the last few decades, including
HIV, Ebola, and hepatitis C and E. Infectious disease outbreaks pose a
major threat both nationally and internationally. They easily cross
borders and can threaten economic and regional stability as has been
demonstrated historically by influenza and SARS epidemics.
A notable source of variability in the annual mortality rate of
industrialized countries is influenza. The main complication of the
influenza virus is that of pneumonia which accounts for much of the
morbidity and mortality. Secondary bacterial pneumonia associated with
influenza is most common among the chronically ill, who are more
susceptible to this complication. Occasionally flu rates can reach
pandemic proportions across the population.
Influenza Pandemic
Impact on Insurance Portfolios
RMS has developed a model to quantify and manage risk to
influenza pandemic. This model is incorporated into the RMS Infectious
Disease Model software platform and analyzes the impacts on casualty
lines of business including life, health, and workers compensation and
other lines covering death and injury.
RMS clients are actively using the model to perform a
range of tasks including: Manage Portfolio Risk
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Generate occurrence exceedance probability (OEP) loss distributions
by line of business and in total |
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Quantify the greatest potential losses to portfolios under a
management selected benchmark pandemic scenario |
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Analyze key drivers of loss by country, account and location |
Examine 'What If?' Scenarios
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Quantify and evaluate risk transfer options such as treaty
reinsurance or securitization structures |
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Estimate impacts of vaccine production and efficacy as well as
various national response measures |
Implement Underwriting Processes
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Evaluate and price alternative layers for excess policies or
reinsurance treaties |
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Design and implement underwriting guidelines to diversify portfolio
risk |
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Understand the relative risk across age brackets, geographies, and
other characteristics of accounts and portfolios with global
exposure |
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