Tweet
Insurers: Bird flu pandemic could cost $53 billion
Bird flu pandemic could cost insurers $53 billion
Mon Mar 27, 2006 1:20 PM ET
NEW YORK, March 27 (Reuters) - A bird flu pandemic could cost European life insurers as much as 20 billion pounds ($34.92 billion) in extra claims and U.S. insurers about $18 billion, a report said on Monday.
These payouts would likely be tolerable for the life insurance industry; and as long as an outbreak were temporary, the companies' credit quality would not likely change, but profitability could be hurt, the report from Fitch Ratings said.
A deadly bird flu virus has spread into Europe and Africa and resurfaced in Asia, but so far the virus mainly affects birds. The International Monetary Fund has warned that the flu could hurt the economy globally. So far, there have been just over 100 confirmed human deaths from the virus, but Fitch said experts have estimated a possible global death toll of a flu pandemic at 2 million to 50 million.
Among insurers, life insurers would likely be hardest hit by the bird flu, Fitch said. But a substantial part of the risk of life insurance payouts would likely be borne by reinsurance companies, which provide insurance to insurers.
The ratings agency estimated that 400,000 bird flu deaths could occur in Europe and 209,000 in the United States. But an outbreak of the disease could increase demand for life insurance, which could mitigate losses from deaths, Fitch said.
Large outbreaks of bird flu could cut into investment market performance, which would also hurt life insurers, Fitch said.
Mon Mar 27, 2006 1:20 PM ET
NEW YORK, March 27 (Reuters) - A bird flu pandemic could cost European life insurers as much as 20 billion pounds ($34.92 billion) in extra claims and U.S. insurers about $18 billion, a report said on Monday.
These payouts would likely be tolerable for the life insurance industry; and as long as an outbreak were temporary, the companies' credit quality would not likely change, but profitability could be hurt, the report from Fitch Ratings said.
A deadly bird flu virus has spread into Europe and Africa and resurfaced in Asia, but so far the virus mainly affects birds. The International Monetary Fund has warned that the flu could hurt the economy globally. So far, there have been just over 100 confirmed human deaths from the virus, but Fitch said experts have estimated a possible global death toll of a flu pandemic at 2 million to 50 million.
Among insurers, life insurers would likely be hardest hit by the bird flu, Fitch said. But a substantial part of the risk of life insurance payouts would likely be borne by reinsurance companies, which provide insurance to insurers.
The ratings agency estimated that 400,000 bird flu deaths could occur in Europe and 209,000 in the United States. But an outbreak of the disease could increase demand for life insurance, which could mitigate losses from deaths, Fitch said.
Large outbreaks of bird flu could cut into investment market performance, which would also hurt life insurers, Fitch said.
Comment