BOSTON, June 27, 2013 — Catastrophe risk modeling firm AIR Worldwide (AIR) announced today that it has released its Pandemic Flu Model. AIR developed its Pandemic Flu Model to capture the excess morbidity, mortality, and insurance losses caused by pandemic influenza. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK).
The model includes more than 18,000 simulated events, ranging in severity from mild to severe, that can start and spread anywhere in the world and last from months to years. This new model builds upon AIR’s existing mortality modeling capabilities that enable clients to enter injury or life exposures in its natural catastrophe models to obtain estimates of loss.
“Pandemics are low-frequency events with a potentially high level of severity and impact to insurers and reinsurers in the areas of life, health, and disability,” said Nita Madhav, senior scientist at AIR Worldwide. “Other lines such as workers compensation, personal accident, and business interruption may also incur significant losses, depending on policy specifics. This is the first AIR model to estimate losses due to infectious disease risk, and we’re confident that the pandemic flu model will provide clients with a more robust understanding of the risk and advanced capabilities for managing it.”
AIR developed the model to capture disease transmission dynamics along with short- and long-range population movements. The hazard component uses the latest scientific research to model ignition parameters, pathogen characteristics, and seasonality. The model also explicitly accounts for mitigation efforts during the pandemic, such as the development and administration of vaccines, antivirals, and travel restrictions. Infection severity, medical outcomes, and insurance losses are estimated by gender and age cohort.
Peer-reviewed by eminent public health and scientific experts, AIR’s Pandemic Flu Model uses the highest-quality data regarding illness outcomes and associated costs from Verisk Analytics subsidiary Verisk Health, a leading provider of risk assessment and decision analytics to the healthcare industry.
In developing the model, AIR created a unique exposure database that includes worldwide population data, age distributions, sex ratios, and preexisting health conditions, all of which can mitigate or exacerbate a pandemic.
“The 1918 Spanish flu pandemic was one of the largest public health catastrophes of the past century, causing life insurance losses of nearly $100 million, which is comparable to nearly $20 billion today,” continued Madhav. “Insurers striving to manage pandemic risk need to know that a modern-day pandemic on par with the Spanish flu of 1918 could occur. Of course, post-1918 medical advancements and the graying of the global population would affect the severity of a pandemic today. Probabilistic modeling accounts for medical advancements and other societal changes and enables a more complete understanding and management of pandemic risk than relying on the historical record alone.”
The AIR Pandemic Flu Model is currently available in Version 15.0 of the CATRADER® catastrophe risk management system.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 90 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, and agricultural risk management. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK) and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.