Epidemic risk modeller Metabiota has announced details of its Pathogen Sentiment Index, a tool that enables the estimation of public fear and behavioural change as a result of infectious disease outbreaks, and which is to be used to develop epidemic insurance solutions through an exclusive agreement with reinsurer Munich Re and broker Marsh.
In August last year, Metabiota announced the launch of its commercial risk modelling platform and preparedness index for epidemic risks, as well as the signing of a strategic agreement with reinsurance giant Munich Re.
Now, the epidemic risk modeller has revealed details of its Pathogen Sentiment Index, which will be used as the basis for innovative epidemic insurance solutions to be developed and brought to the marketplace by Munich Re and insurance and reinsurance broker, Marsh, under an exclusive agreement with the pair.
Bill Rossi, Chief Executive Officer (CEO), Metabiota, said: “Infectious disease outbreaks can inflict enormous social and economic disruption and public fear and panic can only magnify those disruptions. Until now, that risk has been difficult to measure. By providing a comprehensive and objective methodology for quantifying the potential ripple effect of epidemic risk, we’re able to provide the insurance industry with the tools to underwrite risk and deliver polices to protect countries and corporations from financial blowback.”
According to Metabiota, the Index combines the firm’s extensive scientific expertise with deep analytics into historical infectious disease outbreaks with consumer sentiment scoring for each pathogen.
Metabiota explains that for the first time, travel and tourism businesses, which is the initial commercial target for this offering, will be able to access a public fear trigger-based business interruption policy, which is designed to provide coverage against a substantial financial loss as a result of an epidemic.
Munich Re’s Head of Epidemic Risk Solutions, Gunther Kraut, noted that the reinsurer sees “big potential in using the Sentiment Index as a trigger concept as it makes people’s anxiety measurable in terms of economic impacts. For us, this is a great tool to expand the frontiers of insurability.”
Metabiota states that while the travel and tourism sector is the initial commercial target for the offering, businesses of all sizes will benefit from this type of epidemic risk solution.
As an example of the potential financial impact of epidemics, the Zika virus could end up costing Latin America and the Caribbean as much as $18 billion, explains Metabiota.
The Index has been designed to be flexible and is able to be quickly updated to include new pathogens, including newly emerging diseases. Furthermore, the Index is regularly updated to reflect potential developments that can influence public fear, and has been extensively stress tested against more than ten years of media reporting on historical outbreaks.
Christian Ryan, U.S. Hospitality, Sports and Entertainment Leader, Marsh, said: “The travel and tourism industry is often on the frontlines when it comes to taking the hit from an infectious disease outbreak. Through this strategic collaboration, we will be able to provide our hospitality clients with tools to identify the gaps between real and perceived pandemic risks and provide a risk mitigation solution that provides financial protection for the consequences of an epidemic.”
