r/StockMarket – In 2009, AIG Predicted They May Lose $6.2 billion within the Occasion of a Extreme Influenza


(supply) https://www.secinfo.com/dsvr4.s82v.htm

Precise line: https://www.secinfo.com/dsvr4.s82v.htm?Find=%221918%20Flu%20Epidemic%22&Line=179247#Line179247

Pandemic Influenza

“On April 25, 2009, the World Well being Group (WHO) acknowledged that new lab research verify that the most recent outbreak of Swine Flu is a brand new pressure of a humanly transmissible influenza virus that has the potential to set off an influenza pandemic. On April 29, 2009, the WHO raised its flu alert stage to five, the second highest stage, which signifies a pandemic is imminent.

The swine flu virus has the potential to unfold quickly and has already unfold from North America to Australia and Asia. If such a pandemic had been to happen, early quarantine and vaccination may very well be important to containment. Though AIG continues to observe the growing info, present proof suggests {that a} ensuing pandemic can be of reasonable severity with some probability that it may very well be extreme. A major international pandemic might have a cloth antagonistic impact on Life Insurance coverage & Retirement Providers working outcomes and liquidity from elevated mortality and morbidity charges.

Using a scenario-based strategy and an trade commonplace mannequin, AIG has analyzed its insurance coverage threat related to pandemic influenza. As beforehand reported, for a extreme occasion, thought of to be a recurrence of the 1918 Flu Epidemic, the evaluation signifies AIG might incur a pre-tax lack of roughly $6.2 billion if this occasion had been to recur. For a gentle occasion, thought of to be a recurrence of the influenza epidemic of 1968, the evaluation signifies AIG might incur a pre-tax lack of roughly $0.6 billion if such an occasion had been to recur. These analyses had been based mostly on 2007 coverage knowledge representing roughly 95 % of AIG’s particular person life, group life and credit score life books of enterprise, web of reinsurance at that time limit. These estimates don’t embrace claims that may very well be made underneath different insurance policies, akin to enterprise interruption or common legal responsibility insurance policies, and doesn’t replicate estimates for losses ensuing from disruption of AIG’s personal enterprise operations or asset valuation losses that will come up consequent to such a pandemic. These associated losses could also be important and in some eventualities exceed the losses incurred from AIG’s life insurance coverage coverages.

Though it’s too early to be definitive concerning the seemingly dimensions of the mixture life insurance coverage loss, if there’s a swift and efficient response for its containment, some key options of the swine flu virus that place its seemingly impression towards the decrease finish of the vary offered above are as follows:

• Virulence:  The mortality stage of these contaminated is estimated to be considerably decrease than that of the 2006-2007 “avian flu” (H5N1) virus however increased than that of a seasonal flu outbreak; • Infectiousness:  The extent of infectiousness, measured by the virus’s preliminary reproductive quantity is at present estimated to be beneath that of every of the final three pandemics; • Human Immunity:  The swine flu is a pressure of the H1N1 influenza virus and therefore among the inhabitants might have constructed up immunity to the virus; • Age profile of deaths thus far:  Though at present affecting an analogous age profile to that of the 1918 pandemic flu, preliminary medical stories are predominantly recording “extreme pneumonia” signs, that means that it is probably not triggering the worst case state of affairs of a extreme immune system response within the affected inhabitants like that within the 1918 Flu Epidemic.”


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