Lloyd’s says the global economy could lose up to $US41.7 trillion ($65.48 trillion) in a future pandemic based on analysis of past outbreaks including covid, SARS in east Asia and the 1918 flu.

In a paper produced with the Cambridge Centre for Risk Studies, the market warns impacts from the next contagion may be more acute, partly due to factors that emerged during covid.

“Combined with rising ‘anti-vax’ sentiment, ‘lockdown fatigue’, economic instability, the outbreak of a new infectious disease could have more extensive and lasting consequences than we experienced from Covid-19.

“Alongside trends such as the rise in vaccine scepticism ... and growing geopolitical tensions, it may be more challenging in future to fight an infectious disease through global vaccination programs, assuming a vaccine can be developed.”

The paper says even in its least severe scenario, global economic losses could hit $US7.3 trillion ($11.46 trillion).

In an extreme scenario, global travel would be heavily restricted, with impacts exasperated by vaccine development struggles, according to the paper.

“A protracted pandemic could also lead to civil unrest as the public becomes fatigued by severe lockdown measures.

“The aftershock of the pandemic could last long after restrictions ease, delaying the return to pre-pandemic normality for several years due to inflation, persistent unemployment and reduced consumer spending.”

The paper’s extreme scenario is one in which a highly virulent virus such as a haemorrhagic pathogen spreads in many countries.

Lloyd’s corporate affairs director Rebekah Clement says the insurance industry is well equipped to help businesses and governments prepare for pandemics.

“As well as paying claims, insurers can support with advice on proactive measures to lessen the impact of potential crisis and can mobilise resources and expertise to support rapid emergency response and containment efforts.”

See the paper here.

For in-depth analysis, features and opinion, read the latest Insurance News magazine