Insurance Industry News from ProgramBusiness.comReinsurers: Major Losses Not Expected from Flu Pandemic Losses
As reported in Reuters, last week European reinsurers said they still expected no major losses from an influenza outbreak that the World Health Organization (WHO) declared the first flu pandemic of the 21st Century.
"The WHO moving to phase 6 doesn't fundamentally change our view that we do not expect tangibly higher loss claims due to the swine flu," a spokesman for Hannover Re, the world's fourth-largest reinsurer, said last Friday.
The United Nations agency on Thursday raised its pandemic flu alert to phase 6 on a six-point scale, indicating the first influenza pandemic since 1968 was under way, and said it was shifting from an emergency to a longer-term response.
Flu concerns weighed on airline and other tourism-related stocks in Asia on Friday but boosted shares in vaccine makers such as GlaxoSmithKline, Novartis and Sanofi Aventis.
The world's biggest reinsurer, Munich Re on Friday, June 12, said it was sticking to a statement it made last month, in which it said it did not expect major losses from swine flu.
That statement said that even if the WHO raised its flu alert to the highest level, it did not necessarily mean that the world was facing a serious pandemic, because the agency's pandemic alert phase did not reflect the severity of a pandemic.
World No. 2 reinsurer Swiss Re said in a statement updated on June 12 that it was closely tracking the health threat from the H1N1 virus but that recent pandemics have been much more modest than the pandemic of 1918, which killed at least 40 million in the time before antibiotic medicines.
"Swiss Re is well prepared to deal with the insurance, financial and business continuity risks that could arise from a pandemic, and to continue writing new business afterwards," it said.
Reinsurers, which help their insurance company customers pay the damage claims bills for large losses from storms, earthquakes or deaths in a pandemic, use sophisticated statistical models to assess and price risks they cover.
Swiss Re estimated its mortality claims from a major lethal pandemic loss -- which might occur once in 200 years -- at 3.5 billion Swiss francs ($3.3 billion), for example, noting that experts expect the current flu outbreak will be milder.
The chief executive of France's SCOR, the world's fifth-biggest reinsurer, told Reuters in late April that his company's exposure to swine flu was very limited. Click for the whole story...