Coronavirus – What every actuary advising an Australian financial services organisation should know

In this article, Alex Stitt provides an overview of what is currently known about the 2019-nCoV outbreak and what actuaries advising financial services organisations (FSOs) should be thinking about.

The world may be on the edge of a pandemic of the novel coronavirus (2019-nCoV). At 11 February, 25 countries had a total of 43,107 confirmed cases of the coronavirus and there have been 1,018 deaths. The World Health Organisation (WHO) have developed a dashboard tracking affected countries, confirmed cases and deaths. Another useful dashboard with some deeper analysis of emerging cases is at – coronavirus.

This article assumes you have read the 2006 paper: “PANDEMIC – What every Actuary advising an Australian financial services organisation should know” and references relevant sections of that paper.


2019-nCoV appears to have arisen in the city of Wuhan in Hubei province, China some time in December 2019. It was first reported to WHO on 31 December. In the five weeks since then, it has spread across the globe and caused multiple deaths inclusive of cases in Wuhan.

Given the very fast global spread of the disease and its potential to develop into a pandemic, FSOs should review and update their pandemic preparedness and response plans as a matter of urgency.


In their Q&A on Coronaviruses WHO says “Coronaviruses are a large family of viruses found in both animals and humans. Some infect people and are known to cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS)”.

2019-nCoV is ‘novel’ because it has not been identified in humans before. Because of this, humans are likely to have low, or no, prior immunity to the virus. It causes respiratory illness.

WHO also says “As with other respiratory illnesses, infection with 2019-nCoV can cause mild symptoms including a runny nose, sore throat, cough, and fever. It can be more severe for some persons and can lead to pneumonia or breathing difficulties. More rarely, the disease can be fatal. Older people, and people with pre-existing medical conditions (such as, diabetes and heart disease) appear to be more vulnerable to becoming severely ill with the virus”.

Human to human infection is occurring. This is a necessary pre-condition for a pandemic. About 13% of cases outside China were acquired locally, but at this early stage, the ‘attack rate’ or infectivity of the virus is not well established. See section 10 of “PANDEMIC” for a discussion of attack rates.

Source: WHO Situation Report 14

The following is quoted from a Sydney Morning Herald article of January 21

“Professor James McCaw at the University of Melbourne is part of a working group urgently convened by the WHO to try to model the spread of the virus. So far their work shows each infected person tends to infect three others. That makes it more infectious than the flu but slightly less infectious than SARS and much less infectious than measles, where one person is likely to infect up to 20 people”.

The ’case fatality rate’ (see section 10 of “PANDEMIC”) appears to be about 2%, and possibly lower as better identification and reporting of cases catches up with reporting of deaths. The 1919 Spanish Flu had a fatality rate of >2.5%, (and note some estimates claim rates as high as 10%) and the seasonal flu has a fatality rate of about 0.3%.

The severe morbidity rate, i.e. those requiring hospitalisation or intensive nursing, appears to be between 15% and 20%, but again, this rate may fall as identification and reporting of less severe cases improves.

Infected individuals are probably infectious before the onset of symptoms. This feature of the virus makes quarantine and border control much more difficult. Estimates of the infectious incubation period range from 2 days to 14 days – hence the 14 day quarantine period many governments have imposed or suggested for those who may have been exposed to the virus.


Although written in the context of the 2006 Avian Bird Flu potential pandemic, much of section 12 of “PANDEMIC” remains relevant. In particular:

  • The discussion of the different risks and their mix across different FSOs remains relevant.
  • Some of the disease dynamics of 2019-nCoV are similar to those of a potential Influenza pandemic, meaning the indicative numbers by risk remain relevant, and in any event can be adjusted according to your ‘beliefs’ about the possible emergence of a 2019-nCoV pandemic.


Much of section 14 of “PANDEMIC” remains relevant, in particular the discussion of how FSOs can influence their staff, members and customers so as to reduce the spread of disease.

The WHO Q&A on Coronaviruses is a concise and clear lay resource about 2019-nCoV.

The Australian Government health-topics – novel coronavirus 2019 is a useful resource for individuals regarding hygiene, self-identification and self-management.


As in 2006, let commonsense prevail, don’t panic, and ‘don’t kiss your pets’.

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