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Pandemic Sidebar: Pandemic Research

Pandemic Sidebar: Pandemic Research
by Ronora Stryker

An interview with Jim Toole, lead researcher for SOA's pandemic research project.

You are working with the SOA on research that examines pandemic influenza and its implications to the life and health insurance industry. What are some of the important issues of a possible pandemic your research will address?

The first question on everyone's mind is solvency. How bad could it get and how prepared are we for it, as an industry and as individual companies? But ultimately, I think an even bigger issue will be the positioning of the industry post pandemic. Barring the most extreme scenarios, the industry will survive and there will be a strong demand for our products. Companies have invested a great deal of time and money building brand equity and should take prudent steps to protect that investment.

The issues facing health insurers are different, as they are complicated by policy issues surrounding access, affordability and quality. Even under normal conditions, there is a huge amount of stress on the healthcare system and unless expectations are managed, there is the potential for significant legal repercussions. I secretly wonder whether a pandemic might not be the "short, sharp shock" which pushes our fractured healthcare system over the edge into a more stable configuration.

So, it boils down to does the industry want to be reactive or proactive?

Every company needs a plan and a message. It would help if the industry had a plan, but it is unclear what organization might step up to the plate to develop it. A critical part of the plan is a communication strategy. Media abhors a vacuum, and the height of a crisis is not the time to be crafting your message. And you don't need a communication strategy just for the pre–pandemic period; you need a clear, strong message during a pandemic event and, just as importantly, during the post–acute and recovery phases.

What type of research methods are you utilizing to accomplish your goals?

At this stage of the process my primary research method has been to cast as wide a net as possible for published sources (books, white papers, magazines and newspapers) and reports from governmental and quasi–governmental agencies (World Health Organization (WHO), federal in–cluding Canada, New Zealand, United Kingdom and United States, state and local government). Because of the dynamic nature of the subject, research results can change very rapidly, but at this point I feel I have a good understanding of the space and the way in which primary scientific information is incorporated into the variety of secondary sources.

The research is complemented by discussions with the project oversight group (POG) and other insurance experts, as well as academic, medical and public health officials. I am fortunate to have access to local assets at Wake Forest University and Baptist Medical Center. I am able to sit down and brainstorm with people in a way that would be more difficult in larger metropolitan areas.

Putting all this information together into the context of the insurance industry is where the alchemy occurs. At this point I really don't know what the results will be, but I fully expect there to be surprises arising from the juxtaposition.

When is the research scheduled to be complete and how can interested individuals access the information?

Preliminary results of the research will be presented at the SOA Spring Health Meeting on June 20 to 22, 2006 in Hollywood, Florida. Barring unanticipated developments, it is our intention to provide a timely, responsive, peer reviewed research product by late July. The results will be available on the SOA Web site "Pandemic" section.

Part of your research involved attending a business planning national summit on pandemic influenza. Who sponsored the conference and what was the purpose?

I had the opportunity to attend a business planning summit sponsored by CIDRP (Center for Infectious Disease Research & Policy) at the University of Minnesota and the U.S. Chamber of Commerce. The purpose was to bring business and government leaders together to assess the current state of preparations and discuss ways to work together to effectively prepare for pandemic influenza. Like so much about this disease, it sprung up at the last minute, but, thanks to the flexibility of the POG, I was able to attend and it turned out to be a wealth of information.

What information was gained from your participation in the planning summit that can assist insurers in preparing for a possible pandemic?

The plenary sessions dealt with practical information needed to help develop effective and timely corporate pandemic influenza plans. The role that business should play in facilitating the development of local and regional pandemic influenza preparedness plans was also discussed.

Breakouts by sector were provided to allow individuals from within each industry to discuss problems facing them and potential solutions. Business continuity, risk assessment and mitigation, public policy, legal, supply chain and human resource elements all need comprehensive planning to minimize disruption in the event of a pandemic. Discussion between business sectors was encouraged due to the interdependence of the business community and supply chain issues.

Although your research is not complete, are there any other considerations that you can share to help insurers and actuaries evaluate the risk associated with a pandemic?

The WHO and virtually all mainstream virologists agree that we are at greater risk for an influenza pandemic than at any time since 1968. There are a number of troubling warning signs which indicate that, should a pandemic occur, it would not be mild, but ferocious in intensity.

However, the virus is unpredictable and the current strain might never achieve human–to–human transmission, a requirement for a pandemic to occur. Yet even if the H5N1 virus never reassorts to enable human–to–human transmission, it is a virtual certainty that pandemics will continue to occur periodically. The question is when and with what level of mortality and morbidity.

Casualty actuaries are well versed in modeling the implications of tail risk associated with extreme events such as earthquakes and hurricanes. While we may hope that a pandemic never occurs, we are that much better off for thinking through the implications of extreme events and preparing for such possibilities. And if we are fortunate enough to experience a mild pandemic, we are that much better prepared to respond as an industry and as a society for having considered the possibility of a severe event.

Jim Toole can be contacted at