Avian Influenza

There is now a widespread concern that the Avian bird flu virus might mutate into a human-to-human virus. This might even become a worldwide pandemic.

This virus has been tracked from China, Hong Kong, Japan, Thailand, Viet Nam, Indonesia, Laos, Korea, Cambodia, Malaysia, Mongolia, Russia and Kazakhstan. Luckily, the U.S still doesn't have a single bird that tested positive with this virus.

147 people are known to have been infected with this virus, 78 of them have died. The mortality rate of this illness is 53 percent. Experts have evaluated that the people who caught the virus probably contacted the birds directly.

How would this pandemic affect life insurance companies? This answer is even more difficult to reach than predicting the potential damage from dozens of tropical storms. A severe influenza pandemic might cause $133 billion in additional death claims.

There is a terrible risk of the life insurance companies to lose a severe amount of money. Because there isn't enough money to stop the Avian influenza, it is extremely difficult to predict exactly what will happen in a couple of years. Perhaps, in decades to come, this Avian influenza might become extremely contagious and spread throughout humans.

During a pandemic wave and for a time afterward, many people would be hesitant to expose themselves to crowds. Catalog and internet shopping would be likely to replace in-person shopping. Just thinking about it scares people.

Public places such as restaurants, movie theaters, museums, stores, public transportation, shopping malls, sports events and concerts would all be empty and out of business. This could cause so much economical damage.

Other than that, people would probably be inside their homes for a remainder of the time to avoid contact with anyone infected with this dreadful virus. The deaths of this virus probably have a lot to do with bacterial pneumonia, just like in the 1918 pandemic which killed about 675,000 people.

Life insurance companies would also be horribly affected. In fact, there will be a lot of life insurance implications. The sudden effect of such unpredicted losses would clearly affect all life insurers, particularly the weaker ones. If this virus does spread worldwide, there might be death claims of $31 billion industry-wide. Life insurance companies better watch out.