Ebola. MERS. Avian influenza. Meningitis. These are the current disease outbreaks as reported by the Centers for Disease Control and Prevention (CDC). But what differentiates an outbreak from an epidemic from a pandemic is all in the semantics.
At this writing, there are no current pandemics, according to August Pabst, a spokesperson for USAID, a Washington, DC-based federal agency helping to stabilize countries by investing in agriculture, health systems and democratic institutions. USAID follows CDC and World Health Organization (WHO) guidance in declaring a pandemic. Influenza is the most common type of pandemic experienced in the United States, and the most recent strain of avian influenza, H7N9, is being watched by the CDC and WHO.
What hasn’t been called a pandemic — and may never be — is Ebola. That’s because according to nearly all definitions, Ebola is not close to meeting the criteria for a pandemic. As late as October 2014, AIR Worldwide stated the outbreak in west Africa is “unprecedented” in size, but that the probability of a global pandemic remains low.
Still, pandemics are top of mind for many insurers. A 2013 survey by Towers Watson revealed that global insurance industry executives ranked global pandemic as one of their top three most important long-term, extreme risks facing the industry. It’s a fear that had a few insurers reacting quickly, and perhaps somewhat rashly, when faced with the unfounded possibility that Ebola would be declared a pandemic.
But what is a pandemic? According to the WHO, a pandemic is “the worldwide spread of a new disease.” However, even WHO officials can’t agree on when to use the term. In responding to criticism that officials were too quick to label the 2009 H1N1 outbreak a pandemic, the WHO responded with a comprehensive explanation of what criteria was used to determine pandemic. It all came down to a few words.
The confusion came just a month before the pandemic was declared, when the WHO revised their description of pandemic to remove the words “enormous numbers of deaths and illnesses.” Instead, the revised description now reads “An influenza pandemic may occur when a new influenza virus appears against which the human population has no immunity.”
Not that the new definition clears anything up, since many organizations use different criteria to determine a pandemic. The CDC, sticking within the influenza virus realm, calls uses the term “pandemic” whenever “a novel influenza virus emerges that can infect and be efficiently transmitted among individuals because of a lack of pre-existing immunity in the population” while the Dictionary of Epidemiology defines pandemic as “an epidemic occurring worldwide or over a very wide area, crossing international boundaries, and usually affecting a large number of people.”
Historically, severe pandemics have been uncommon. The black death (believed to have been the bubonic plague) that claimed between 75 million and 200 million lives between the years 1346 and 1351, is still ranked as the worst pandemic in history. However, modern-day pandemics exist – as of 2011, HIV/AIDS is estimated to have infected 60 million people and AIDS has killed 25 million, according to the Robert Wood Johnson Foundation. Other pandemics include influenza, which is a commonly recurring type of pandemic. While the full impact of influenza is not known, the CDC estimates 39,000 deaths annually from the illness.
How insurers respond
When Ebola showed signs of spreading, a few insurers moved quickly to exclude coverage. Gigi Norris, managing director of Aon Risk Solutions’ western regional health care practice in San Francisco, calls the reaction reprehensible. ‘With respect to Ebola, this is the first time I’ve ever seen anything like this with everyone rushing to issue an exclusion,” she said.
Norris says the move is a reactive one, and based on what she calls a culture of fear. In her estimation, those fears are unfounded. With approximately 13,000 people around the world sick with Ebola, she believes the exclusions aren’t warranted.
That’s to be expected, says Huhnsik Chung, partner in the insurance and reinsurance department with Edwards Wildman Palmer in New York. “Every few years, we have an epidemic that’s localized and there’s a growing fear it may grow into a pandemic,” she said. “Insurers tend to narrow and exclude the scope of coverage, which leads to certain market opportunists providing that coverage.”