Epidemic risk modeller Metabiota predicts that in 2018 insurers will focus more on speed with increased appetite for risk to reach the needed returns and innovation in the InsurTech space will make this possible, opening up opportunities in historically excluded risks such as terrorism and pandemics.
Metabiota Head of Data Research on Climate Risk, Damien Joly, believes that health risks around the world will increase next year due to the connection between catastrophic weather events and public health.
Experts predict the financial impact of a global epidemic amounts to 0.7% of global income, or $570 billion.
In 2018 modelling communities are expected to improve and enhance forecasting models with higher resolution and more timely data such as electronic health records and the genetic sequences of pathogens; these innovations could open up multi-billion dollar opportunities for re/insurers in risks that have traditionally been uninsurable.
Metabiota said forecasting epidemics is the holy grail of infectious disease modelling and one that looks increasingly achievable in the year ahead.
With many of today’s critical risks to human health and well-being being interrelated – from climate change to epidemic outbreaks, armed conflict and natural catastrophes – Senior Scientist Ben Oppenheim noted that in 2018, the international community will focus on new initiatives that address the links between global threats.
“As a result, a single event has the potential to set off a chain of crises. The challenge is that the current systems that monitor, model, and manage each crisis are not integrated. Two factors will start to break down those silos.
Big data, machine learning and artificial intelligence techniques add leverage to predictive modelling, combining technology, computing power and science to develop innovative insurance products.