Modeling the spread of pandemic influenza for insurance industry

International audienceAs far as Insurance Industry is concerned, the emergence of a pandemic could obviously lead to an excess of death in the insured population, and therefore to a possible bankruptcy. Consequently, anticipating and quantifying this risk has become of paramount importance, and this is totally consistent with Solvency II, which is the new set of regulatory requirements for insurance firms that operate in the European Union. This article aims to build a stochastic epidemic model to forecast the spread of pandemic influenza. Initially, a small number of infected people appear in one city, and infection is spread to other cities when they travel. The model includes the effects of prevention and control strategies. Moreover, this model is well adapted to insurance companies because it not only estimates the number of dead people, but also identifies the number of dead insured people, and therefore the potential cost for insurance companies