Assessing risks is part of the core business of insurance companies. To do this, they sometimes use very sophisticated and tried-and-tested models that have to be constantly checked and adapted to reality at regular intervals. But how can this work in a pandemic that changes so much that was previously considered a fixture? Christoph Nabholz is responsible for mortality and behavioral economic research and development at the reinsurer Swiss Re in the area of ​​life and health insurance. In the interview, he talks about what the models can do and on which factors the further spread of the pandemic depends. 

ZEITONLINE: Mr. Nabholz, how does Swiss Re model a pandemic like the one at present?

ChristophNabholz: Completely independent of Corona: As a reinsurer, Swiss Re has a pandemic model. We must document the risks we take on our books and to the regulatory authorities that we are sufficiently solvent to bear the risks in the event of damage. And a pandemic is a major risk that we must always be prepared for.

ZEITONLINE: How does such a general pandemic model work?

Christoph Nabholz © private

Nabholz: Most are most likely built along the lines of the 1918 Spanish flu pandemic. How did the Grippedamals spread? How many people fell ill where at what time, how many died? Who was hit particularly hard by the pandemic? If you take this as a worst-case scenario, you can adapt it to today's market conditions and see how such a pandemic would impact today. At that time there were three flu waves - it could well be that we will see several waves again this time.

ZEITONLINE: What do you mean by market conditions?

Nabholz: Medicine has evolved over the past 100 years. We have built up a lot more medical capacity, there are new drugs. There are vaccinations against flu viruses. We live in a highly globalized world. This affects the spread of the virus, but it also enables an internationally coordinated response. I find it amazing how quickly and strongly governments around the world - with a few exceptions - reacted. This was of enormous importance given the exponential growth in the number of infections.

ZEITONLINE: How well is the 1918 flu suitable as a model for the current corona pandemic?

Nabholz: Back then, with a population of 1.8 billion people, 50 million people died - we are still a long way from that. I also don't think that so many people will die this time, precisely because the governments very quickly took very drastic measures to curb the spread of the virus. I'm amazed at how quickly you can see results.

ZEITONLINE: Did the models foresee this?

Nabholz: The models are not designed to provide forecasts or predictions. They calculate scenarios - that is, they look at how the likely numbers of infections, the number of deaths or the economic damage caused by the pandemic develop depending on various parameters. There are currently many such scenarios, not only from us and other insurers, but also from research institutes such as the Imperial College in London, MIT or Harvard. Amazingly, their results are sometimes very different.

Medical advances are becoming more important to assess how the pandemic will develop in the future.

ZEITONLINE: You have already mentioned some possible parameters that are incorporated into the models: the spread of previous pandemics, medical care, political decisions. Which are the most important in the Swiss Re model?

Nabholz: The government's actions are certainly the most influential factor at the moment. Medical advances are becoming more important to assess how the pandemic will develop in the future. What medications are there that could improve the course of Covid 19 disease? We have already registered more than 1,300 clinical trials with such drugs, so mortality could decrease. The second thing we're looking at is, of course, the possible vaccine. More than 100 substances are being tested, eleven of which are in clinical trials - two of which were not developed specifically for Covid-19, but for other diseases. However, you may still be able to help. Vaccination would make people immune, and the virus would spread more slowly.

ZEITONLINE: It still doesn't seem certain that those recovered from Covid-19 are immune.

Nabholz: Maybe not all her life. But usually, coronaviruses don't mutate as quickly as the annual flu viruses. For Sars and Mers, studies show that immunity lasts at least one to three years. I am confident that the immune system of those recovered from Covid-19 will protect them from being reinfected with the novel corona virus for a similar long time.