Insurance could cushion a $14t economic loss from a pandemic scenario

The transportation sector will be significantly hit, which accounts for 10% of the global GDP.

A future human pandemic could lead to global economic losses of up to $13.6t over five years, a systematic risk scenario by Lloyd’s revealed.

The analysis, developed in partnership with the Cambridge Centre for Risk Studies through Lloyd’s Futureset initiative, presents potential impacts ranging from $7.3t in a mild scenario to $41.7t in an extreme case, representing a global GDP reduction of 1.1% to 6.4%.

Economic losses would primarily stem from disruptions across industries due to lockdowns and travel restrictions, with significant impacts on the transportation sector, which accounts for over 10% of global GDP. 

Prolonged international travel limitations could exacerbate these economic challenges.

“Our research shows that insurance is more than a financial safeguard; it is a critical enabler of societal resilience and recovery, and the insurance industry is well-equipped to help businesses and governments prepare for future pandemics with different complexities and variables,” Rebekah Clement, Lloyd’s Corporate Affairs director, said in a press release.