Overview:
Preparedness: COVID-19 and Pandemic Modelling
“It is important to bear in mind that the virus is exceptionally difficult to suppress and will continue to spread unless the restrictions on social mixing and other countermeasures such as contact tracing are adequate. The virus is blind to what time a pub closes and whether patrons are served a substantial meal or not. The virus is indifferent to such considerations and does not bend to the will of the people. When we came out of lockdown in the summer, it was always going to come back, and the experience of the Southern Hemisphere demonstrated how challenging our autumn and winter would be.”
The warming climate and vaccine roll out will turn the situation around this year, but the potential for asymptomatic transmission may still impact the return to normality.
Summary:
Things will continue to get worse in the UK before they improve
The Southern Hemisphere was the first to face COVID-19 in a winter setting, and Melbourne’s second COVID-19 spike in June - September 2020 provided a clear warning of what was in store for the UK in late 2020, with the modelling predicting a significant second wave. Indeed the transmission of COVID-19 increased across Northern Hemisphere countries as soon as temperatures began to cool at the end of summer. Unfortunately, this adverse impact is highly likely to persist whilst temperatures continue to cool in early 2021, and we may not see a significant shift until the climate becomes milder later in the spring.
The risk posed by COVID-19 has not changed since the first wave
The number of people requiring hospitalisation remains the principal risk posed by COVID-19, and hospital admissions in March 2021 are predicted to be similar to first wave peak. The hospitalisation rate of estimated infections has not changed dramatically through time, with around 2-3% of infected individuals requiring hospital treatment. The level of infections in the UK remains very high, and in early January is at similar levels to the peak of the first wave (over 100,000 infections per day).
In principle, the risk to individuals who continue to be exposed, either in the workplace or commuting, also remains comparable to the peak of the first wave. New variants, such as the 'UK variant' (VOC 202012/01), which are transmitted more easily, pose a particular danger in that we can no longer rely on previous containment regimes to suppress the virus adequately.
Two major drivers will contribute to a rapidly improving situation in the UK in 2021:
- Impact of a warming climate, which will reduce the R value for any given set of social mixing restrictions and other precautions in place
- Impact of the vaccination roll-out programme, which will first reduce the impact of COVID-19, such as the number of hospitalisations, and later materially impact the level of transmission (i.e. a reducing R value). However, the potential for asymptomatic transmission is an important consideration and this will impact the return to ‘normality’.
The climatic effect may not be observable in countries with colder winters until temperatures start to rise from March 2021 onwards, with the full effect not felt until later in the summer. The vaccine impact will be dependent on how quickly vaccines are rolled-out across a significant proportion of the population, the timing of which remains uncertain. However, as all current COVID-19 vaccines are non-sterilising, when a vaccinated person encounters COVID-19, they could still contract and transmit the virus, but will be asymptomatic. This has important and perhaps underdiscussed consequences: mask wearing and social distancing will still be needed.
The vaccine is just one of our lines of defence against the virus, and no vaccine is expected to provide enough protection to stop COVID-19 from spreading between people altogether. It looks likely that a gradual return to normality may not begin until Q2, and some restrictions could remain in place for most of the year.
COVID-19: a relatively predictable system to model compared to conventional insurance and reinsurance claims
The processes that drive many insurance and reinsurance claims – such as natural peril events, and man-made accidents – are uncertain, spontaneous and impossible to ‘predict’. The impact COVID-19 would have on humanity was, in some way, conceived in its genetic code when it infected the first human. Thereafter, the spread of the virus has followed mathematical principles. Although it may not be immediately clear how to parameterise the model, using the broadest worldview allows us to learn from other countries as to what our immediate future may hold.
James Robinson,
PhD, COVID-19 Pandemic Modelling Analyst