By Nita Madhav and Molly J. Markey
The 1918 Spanish flu pandemic was one of the largest public health catastrophes of the past century. The first known cases appeared in Fort Riley, Kan. in February of 1918. Global estimates of deaths by the end of the pandemic range from 20 million to more than 100 million -- at a time when the world's population was approximately 1.8 billion. In the United States alone, according to contemporary sources, the 1918 pandemic caused life insurance losses of nearly $100 million, which is comparable to $19.9 billion today.
Such dramatic mortality rates and life insurance losses would have a powerful effect on today's insurance industry. Insurers striving to manage pandemic risk need to know that a modern-day pandemic on par with the Spanish flu of 1918 could occur.
Because pandemics are rare -- just four influenza pandemics have occurred in the past century -- historical data alone are not adequate to address these questions. In addition, post-1918 medical advancements, as well as the greying of the global population, would affect the severity of a pandemic today. Probabilistic modeling allows medical advancements and other societal changes to be accounted for, and enables a more robust understanding and management of pandemic risk than relying on the historical record alone.
Was the 1918 Pandemic So Devastating?
Analysis of the 1918 virus has shown that it contained genetic components that, compared to other flu viruses, made it highly transmissible, as measured by the basic reproduction number (R0), which is the number of new infections generated by an infected person entering into a population with no immunity to the disease. The 1918 virus also possessed genetic factors that made it highly virulent, as measured by the case fatality rate (CFR), the percent of sick individuals that die of the disease. Unique among historical influenza pandemics, the 1918 event caused high excess mortality in younger adults, especially those aged 25-34. Typically, influenza strikes the very young and very old, resulting in a "U"-shaped CFR profile, such as that shown in Figure 1 for the 1928-1929 flu season. However, the 1918 virus exhibited a unique "W"-shaped profile (Figure 1), indicating increased mortality among young- to middle-aged adults.
While the cause of this unique fatality rate profile has not been fully resolved, two contributing factors have been identified. First, the 1918 virus's high virulence triggered a "cytokine storm", an overreaction of the immune system, which often leads to pneumonia and death by suppressing the body's antiviral responses and promoting increased inflammation. Young, healthy adults are more likely than other age groups to suffer a cytokine storm because their immune systems are robust and, therefore, more prone to overreaction. Second, bacterial co-infections such as pneumococcal pneumonia and tuberculosis -- which can be fatal in combination with influenza -- were much more widespread in 1918, especially among young adults. Since it came during World War I, the wartime conditions like increased crowding, malnutrition, troop movements and diversion of medical resources to war efforts, exacerbated the effects of the already-severe pandemic.
The Role of Technological and Medical Advances
In developed countries, many treatments that were unknown in 1918 are now available for influenza. The discovery of the influenza virus in 1931 made it possible to develop vaccines that prevent infections. (Figure 2 is a timeline showing the discovery of the virus and other relevant scientific advances, along with past pandemics.) Today, antiviral drugs are available to treat influenza infection. In addition, antibiotics and vaccines have reduced the rate of bacterial co-infections such as tuberculosis and pneumococcal disease, which cause complications in influenza patients. Excellent supportive care measures are also widespread now; in fact, studies suggest that many patients who died of influenza in 1918 might have survived if modern medicine had been available.
Mortality and Insured Losses from a Modern-Day
"Spanish Flu" Pandemic
To model the effects of a modern-day 1918 pandemic, AIR selected initial parameters consistent with the historical pandemic, including appropriate R0 (reproduction number) values and a range of CFRs that have been adjusted to account for medical and scientific advances since 1918. The effects of improved healthcare, the aging population and more frequent air travel, were also explicitly included.
Given the initial parameters of the pandemic, global spread was simulated using a metapopulation epidemiologic model, which includes both physical modeling of population movement and disease transmission dynamics from infected to susceptible members of the population.
Despite today's medical advancements, AIR estimates that a modern day "Spanish flu" would cause between 21 million and 33 million deaths globally with developed countries experiencing the lowest mortality rates.
Due to medical and technological advancements, fatality rates would be almost 90 percent less than what was experienced during the actual 1918 pandemic. However, increased global travel and an aging population would raise the death rate of a modern day Spanish flu pandemic by 30 percent and 8 percent, respectively, compared to the actual mortality rates in 1918. Taken together, these modeling results suggest that dramatically fewer excess deaths -- nearly 70 percent fewer than actually occurred in 1918 -- would result from a Spanish flu event today. In spite of this sharp decrease in mortality rates, the simulated modern-day Spanish flu event still disproportionately affects young adults. That can be attributed to the ability of the simulated virus to cause a cytokine storm, demonstrating the need for models to capture the effects of this complex syndrome.
There would also be additional life insurance losses of $15.3 billion to $27.8 billion in the United States alone. Benefits paid to beneficiaries in 2010 amounted to over USD 58 billion, according to the American Council of Life Insurers. Therefore, losses from a modern day Spanish flu would represent close to a 48 percent increase in the total benefits paid by the life insurance industry.
But, what is the annual probability of occurrence of a modern-day Spanish flu? Although the AIR model reveals that exceedance probabilities for this event vary by country and age group, the number of deaths it would cause in the United States would have an exceedance probability of 0.5 percent to 1 percent, corresponding to an overall 100 to 200-year return period.
The Value of Catastrophe Models for Assessing Pandemic Risk
Insurance and reinsurance companies should realize that a modern day "Spanish flu" pandemic does not represent a worst-case scenario in terms of pandemic risk.
An emergent pandemic strain could be resistant to antiviral drugs; in addition, it may prove impossible to manufacture a vaccine in a timely fashion due to production difficulties. Hospitals may also be overwhelmed by the influx of the sick and the "worried well" and may be unable to provide care to everyone who needs treatment.
The threat of highly pathogenic avian influenza must also be faced. Pandemics this severe have the potential to cause hundreds of millions of deaths globally, including millions of deaths in the United States alone.
Nita Madhav is a principal analyst at catastrophe modeling firm AIR Worldwide, where she leads development of AIR's Pandemic
Model. Molly J. Markey is a science & technical writer.
March 5, 2013
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