Inference on the Risk Associated with a Future Pandemic for a Health Insurance Company

A pandemic is characterized by the development of severe unknown disease in many people, spreading over several regions. The current Coronavirus disease - in 2019 (COVID19) pandemic has brought new challenges for the entire health sector. Health insurance companies did not have any cover expenses in relative to pandemic diseases. They use protective clauses since the risk is too complex as well as high. The current pandemic forced insurers to study future coverages for that hand of risks. The goal of this study is to study and estimate associated costs of medical treatments of future pandemics, taking this one as a good example. At the beginning of the pandemic, the own company decided to cover hospital admissions for COVID-19, tests performed to track the disease, and Individual Protection Equipments (IPEs), which began to be used more frequently due to pandemic disease. Therefore, to estimate the cost of a pandemic, we considered these three variables (hospitalizations, tests, and IPEs) using the data related to the COVID-19 pandemic. The main challenge of the project was to estimate the number of hospitalizations that the insurer would have to support, taking into account the incidences, the hospitalization rate, and the limit of available beds. In this sense, we used a simulation procedure. It was possible to know how many beds were occupied each day by patients, and thus know how many of the hospitalizations that were estimated to have is that the company would pay them. It is impossible to predict the characteristics of a future pandemic, so in addition to the characteristics of COVID-19, we have also carried out stress tests to evaluate more extreme situations.