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COVID-19 and the insurance industry outlook - no, it isn't over...

In April almost everyone I know became an amateur epidemiologist, or at least, COVID-watcher. Today, many of my non-insurance colleagues are blessed with an almost-normal life. We have been fortunate - meaning it is vital to acknowledge that good policy and a little good luck, brought us here. The industry, however, has to take a slightly longer view. So what does COVID-19 mean for us now? 

On a cases per million bases I chose the following visualisation to help show where New Zealand is positioned, and just how fortunate we are. The US and Brazilian data shows how a badly managed response looks. No detailed critique here, you can find plenty elsewhere. 

The World detail in this chart is deeply suspect data. Some countries are so poor they have inadequate resources, some are so badly managed the data is deeply flawed, some are merely bad at testing. Germany shows how a poor start can quickly be converted into a good outcome - on a cases per million basis it is now doing better than Australia which is battling a resurgence in the disease. 

Removing the US, Brazil, and World, allows us to zoom in on the better performers: 

Australia's resurgence is instructive. It proves several things - given that the Victoria outbreak came from badly managed isolation, it was right that media were highly critical of security breaches. Given that it has happened it is right that government has been slow to create travel bubbles. Australia shows how fragile our position is until there is better news on the vaccine front. The longer we can contain the virus the better our chances get. I am still using the much maligned contact tracing app and signing in where I see the forms - even though most people aren't. Why? if someone breaches isolation and there is an outbreak that data is our best chance of avoiding a nationwide lockdown, again, which is proving so damaging to Victoria.

Removing Australia allows us to zoom in again on the best performers (setting aside China). To further reveal differences, I have switched to a log scale: 

 

Japan is battling a resurgence too, not at the level Australia is, but still ten times as many cases as we are managing (all in isolation). South Korea sits in between, just a little worse than us, but with those cases also being in well managed isolation, like ours. Taiwan has half the cases that we do on a per million basis. Vietnam, functionally none - both would be great places to travel agreement with!

For the insurance industry, whole of pandemic modelling remains a concern. A worst-case scenario would commence with a resurgence along the lines seen in Victoria, which breaks out into general community transmission. Choices we make today, could help. During lock down I cursed myself for not preparing better - but how many of us are wearing masks, even if just when we have a cold? Very few, and those are Kiwis with links to China, Taiwan, Japan, or South Korea. How many of us are contact tracing still? Few, yet that data could have helped Victoria avoid a second lock-down.

It is complacency which would undo all the good work of the team of five million, some of whom are hurting a lot from that sacrifice.

There is good news from the UK, US, and China, about potential vaccines. But the disease is still out there waiting for us. If we are to avoid thousands of deaths then we must remain vigilant. That is not a job solely for the government - it includes us. 

Even if we continue to track along the 'best case' scenario - cases only in managed isolation, and reasonably quick economic recovery, we can expect a fair measure of misery for those worst affected: lost jobs, lost homes, and disrupted lives. Those tend to have claims effects - IP claims last longer, trauma claims are deferred, some turn into life claims. 

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