/ This time I had the answer right here in … The group discussed which parameters to quantify to feed into the system and tossed out ideas on what was missing. Soon Metabiota was providing disease monitoring for Munich Re's life insurance division.“There is a bit of financial alchemy to the whole thing,” Wolfe said. Companies are led by humans who suffer from the same failures of sustained imagination as the rest of us—unable to truly internalize the one-in-100-year disaster until it arrives on our doorsteps. “I think it's very fair to think 9/11 is to terrorism as Covid-19 is to epidemic risk,” Wolfe said.From a certain angle, it will always appear ghoulish for insurers to capitalize on the risk of misery. In late 2011, Kraut's team decided to try to do something about it.“Let's take the example of Munich and car insurance,” Kraut told me. But he soon encountered an unexpected hitch: The mechanisms written to trigger the deal relied on a series of “pandemic phases” monitored by the In studying up on the world of epidemiology, Kraut happened to have picked up a book called Nita Madhav, an epidemiologist, spent 10 years modeling catastrophes before coming to Metabiota. Another had a line on some data about Covid-19's comorbidity with HIV—a critical concern in some African countries.“Are we tracking which countries have put into place economic stimulus packages?” Madhav asked. It was written and produced by Jimmy Webb and originally served as the B-side to Harris' 1968 single "MacArthur Park". In 2015, he hired Nita Madhav, an epidemiologist who'd spent 10 years modeling catastrophes at a company called AIR Worldwide, one of a handful of firms the insurance industry relies on to compute extreme risks.
In the rare event of a pandemic, they would have to cover Munich Re's losses. In insurance it's called diversification. He talks about the intricacies of underwriting with a friendly patience that implies he has done so countless times before, none of which have dimmed his passion. But nobody bought it.”I was so stunned I called him up a few days later to ask him again. (Munich Re, in fact, had worked with AIR epidemiological models in its life insurance calculations.) Munich Re would provide them with annual payments, year after year. In 2015, Metabiota had partnered with German reinsurance giant Munich Re and American insurance brokerage Marsh to develop and sell a policy specifically to guard large businesses against pandemics—to stanch the financial losses and keep them afloat. The promise, for both companies, was enormous. Maybe we will contest this at some point, but for now we may as well celebrate victory.What remains unexplained, of course, is why our video was banned in the first place. 16 First Responders Explain COVID-19 Cases In Their CitiesWe talked to 16 people on the frontlines of the COVID-19 pandemic, all experiencing different points of the infection rate curve. While the bond did eventually deliver the part that covered coronaviruses in April, the World Bank was accused of making the triggers needlessly complex and then dawdling while bodies were piling up.Epidemics are inherently chaotic, as Metabiota itself experienced during the 2014 Even if and when pandemic insurance policies become widespread, they aren't a panacea for the kind of economic ruin we are currently living through. Hurricane Andrew, Hurricane Katrina, 9/11: Each has shifted how our society thinks about risk and the money we set aside to try to prepare for it. And whatever level of truth one ascribed to the glockenspiel's legend, 1517 was just about 500 years ago. Kraut made the decision not to sell.In a sense, Munich Re had dodged a bullet: Had the company succeeded at selling pandemic protection to corporate giants starting 19 months before, it would have collected almost no premiums and now be paying out on every single one. Why do we need to care about it now? Already several prominent US restaurants have sued to try to force the issuers of their current business interruption policies to cover coronavirus losses. “I felt like nobody was paying attention to it,” he said.Then Gunther Kraut's email arrived. Scarier diseases tended to generate more news stories.The Sentiment Index was built to be, as Oppenheim put it, “a catalog of dread.” For any given pathogen, it could spit out a score from 0 to 100 according to how frightening the public would find it. Ben Oppenheim, head of the product team and a political scientist, had studied the work of Paul Slovic, a University of Oregon psychology professor who studied how human beings perceive and respond to risk. She's now the company's CEO.As Wolfe started to appear on stages alongside business leaders, he became convinced that the commercial sector had seriously underestimated epidemic risk. That means Munich Re can set aside less money to prepare for a rare event. The policies would be tailored for each company, but most would contain what's called a parametric solution: a preset amount of coverage that could automatically pay out when the epidemic reached certain thresholds, giving companies an infusion of cash without the delays of filing a claim.The marketing materials for the policy now read like a letter from 2020.
Even a marginal amount of pandemic insurance could have meant fewer layoffs, diluting the economic pain. A little while ago, we got this email from YouTube:That is good. Pandemic insurance would shift at least some of that burden onto investors who'd willingly taken on the risk. Madhav and her team, along with Wolfe and Oppenheim, also researched the broader economic consequences of disease outbreaks, measured in the “cost per death prevented” incurred by societal interventions. He'd tried, without luck, to convince executives that Metabiota could help them avoid the havoc of an epidemic.