IDEAS home Printed from https://ideas.repec.org/a/taf/uaajxx/v15y2011i1p112-136.html
   My bibliography  Save this article

Actuarial Applications of Epidemiological Models

Author

Listed:
  • Runhuan Feng
  • Jose Garrido

Abstract

The risk of a global avian flu or influenza A (H1 N1) pandemic and the emergence of the worldwide SARS epidemic in 2002–2003 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 goes only so far in setting up epidemiological models that better reflect the transmission dynamics. This paper attempts to build a bridge between epidemiological and actuarial modeling and set up an actuarial model that 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: the Great Plague in England and the SARS epidemic in Hong Kong.

Suggested Citation

  • Runhuan Feng & Jose Garrido, 2011. "Actuarial Applications of Epidemiological Models," North American Actuarial Journal, Taylor & Francis Journals, vol. 15(1), pages 112-136.
    • Handle: RePEc:taf:uaajxx:v:15:y:2011:i:1:p:112-136
    DOI: 10.1080/10920277.2011.10597612
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10920277.2011.10597612
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10920277.2011.10597612?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhsin Tamturk & Dominic Cortis & Mark Farrell, 2020. "Examining the Effects of Gradual Catastrophes on Capital Modelling and the Solvency of Insurers: The Case of COVID-19," Risks, MDPI, vol. 8(4), pages 1-13, December.
    2. Caroline Hillairet & Olivier Lopez, 2021. "Propagation of cyber incidents in an insurance portfolio: counting processes combined with compartmental epidemiological models," Post-Print hal-02564462, HAL.
    3. Claude Lefèvre & Matthieu Simon, 2022. "On the Risk of Ruin in a SIS Type Epidemic," Methodology and Computing in Applied Probability, Springer, vol. 24(2), pages 939-961, June.
    4. Philippe Artzner & Karl-Theodor Eisele & Thorsten Schmidt, 2020. "Insurance-Finance Arbitrage," Papers 2005.11022, arXiv.org, revised Nov 2022.
    5. Donatien Hainaut, 2020. "An Actuarial Approach for Modeling Pandemic Risk," Risks, MDPI, vol. 9(1), pages 1-28, December.
    6. Caroline Hillairet & Olivier Lopez, 2020. "Propagation of cyber incidents in an insurance portfolio: counting processes combined with compartmental epidemiological models," Working Papers hal-02564462, HAL.
    7. Chen, Xiaowei & Chong, Wing Fung & Feng, Runhuan & Zhang, Linfeng, 2021. "Pandemic risk management: Resources contingency planning and allocation," Insurance: Mathematics and Economics, Elsevier, vol. 101(PB), pages 359-383.
    8. Francisco J. Zagmutt & Stephen H. Sempier & Terril R. Hanson, 2013. "Disease Spread Models to Estimate Highly Uncertain Emerging Diseases Losses for Animal Agriculture Insurance Policies: An Application to the U.S. Farm‐Raised Catfish Industry," Risk Analysis, John Wiley & Sons, vol. 33(10), pages 1924-1937, October.
    9. Hillairet, Caroline & Lopez, Olivier & d'Oultremont, Louise & Spoorenberg, Brieuc, 2022. "Cyber-contagion model with network structure applied to insurance," Insurance: Mathematics and Economics, Elsevier, vol. 107(C), pages 88-101.
    10. Hainaut, Donatien, 2020. "An actuarial approach for modeling pandemic risk," LIDAM Discussion Papers ISBA 2020025, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    11. Claude Lefèvre & Matthieu Simon, 2020. "SIR-Type Epidemic Models as Block-Structured Markov Processes," Methodology and Computing in Applied Probability, Springer, vol. 22(2), pages 433-453, June.
    12. Camille Delbrouck & Jennifer Alonso-García, 2024. "COVID-19 and Excess Mortality: An Actuarial Study," Risks, MDPI, vol. 12(4), pages 1-27, March.
    13. Xiaowei Chen & Wing Fung Chong & Runhuan Feng & Linfeng Zhang, 2020. "Pandemic risk management: resources contingency planning and allocation," Papers 2012.03200, arXiv.org.
    14. D'Amato, Valeria & Di Lorenzo, Emilia & Piscopo, Gabriella & Sibillo, Marilena & Trotta, Annarita, 2024. "Insurance business and social sustainability: A proposal," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:uaajxx:v:15:y:2011:i:1:p:112-136. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/uaaj .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.