WASHINGTON–An avian influenza pandemic would have a “material effect” on life insurers, but the chances of such an event happening are still “relatively low,” a rating service says.
If the flu ever migrated from birds to humans, there could be a significant number of insurance company downgrades–many by several notches–particularly for those exposed to life and group life, says Moody’s Investors Services Inc. in its recent study “Bird Flu Risk for U.S. Life Insurers: A Tail Event.”
Scott Robinson, a vice president and senior credit officer of Moody’s and author of the report, emphasizes that “the risk of widespread influenza is currently incorporated into our ratings of companies.”
A severe epidemic “would have enormous repercussions through global financial systems,” he said.