Infectious Disease Risk Modeling and Planning
Actuarial applications of epidemiological models
The risk of a global avian flu or influenza A (H1N1) pandemic, and the emergence of the worldwide SARS epidemic in 2002–03 have led to a revived interest in the study of infectious diseases. Mathematical models have become important tools in analyzing the transmission dynamics and in measuring the effectiveness of controlling strategies. Research on infectious diseases in the actuarial literature only goes so far as to set up epidemiological models which better reflect the transmission dynamics. This paper attempts to build a bridge between epidemiological and actuarial modeling and set up an actuarial model which provides financial arrangements to cover the expenses resulting from the medical treatments of infectious diseases. Based on classical epidemiological compartment models, the first part of this paper proposes insurance policies and models to quantify the risk of infection and formulates financial arrangements, between an insurer and insureds, using actuarial methodology. For practical purposes, the second part employs a variety of numerical methods to calculate premiums and reserves. The last part illustrates the methods by designing insurance products for two well-known epidemics: Great Plague in England and the SARS epidemic in Hong Kong.
R. Feng, J. Garrido. (2011) Actuarial applications of epidemiological models, North American Actuarial Journal 15(1), 112–136. Download
Pandemic risk management: resources contingency planning and allocation
Repeated history of pandemics such as SARS, swine flu, Ebola, Zika and COVID-19 have shown that contingency planning for pandemics is a necessary component of risk management for all organizations in modern society. Today’s technology allows us to use epidemiological models to predict the spread of infectious diseases in the similar way that meteorological models are used to forecast weather. Taking advantage of epidemic models, we project the dynamics of demand and supply for medical resources at different phases of a pandemic. Such predictions provide quantitative bases for decision makers of healthcare system to understand the potential imbalance of supply and demand, and to address disparities of access to critical medical supply across different subsidiaries and in the course of the pandemic. This paper extends the concepts of reserving and capital management in the classic insurance literature and aims to provide a quantitative framework for quantifying and assessing pandemic risk, and developing optimal strategies for resources stockpiling, emergency acquisition, and spatio-temporal resource allocations.
X. Chen, W. F. Chong, R. Feng, L. Zhang (2020) Pandemic risk management: resources contingency planning and allocation Download