Kate Dron, Alvin Fu and Randall Wright compare different nations’ experiences of COVID-19, and look at how this knowledge can be used to prepare for the future
During the first two years of the COVID-19 pandemic, different nations experienced different mortality and morbidity shocks. Some, such as New Zealand, even experienced improvements. These differences were due to luck, natural defences and strategy. In our work leading the IFoA COVID-19 Action Taskforce workstream on National Narratives, we heard from actuaries around the world describing the initial impact of COVID-19 on their particular nations (bit.ly/ICAT_other). Now is a good time to consider possible drivers for the endemic phase of COVID-19 in different nations.
At the time of writing, more than half the world’s population has been fully vaccinated by WHO standards. About a quarter of all COVID-19 cases since the beginning of the pandemic are (at the time of writing) currently active infections, since each more infectious variant, such as Delta and Omicron, reaches nearly 100% of new cases within weeks of seeding a nation. Public awareness, good habits, vaccines and antiviral therapies are having an impact on the seriousness of infections. The global death rate from COVID-19 has fallen from an initial high of 3.5% in the first months to 2.3% in 2020 and 1.7% in 2021.
Endemic equilibrium?
All of these developments are moving each nation towards what we might call ‘endemic equilibrium’. This equilibrium will have waves due to variants and seasonality, much like the flu, but trends are emerging. While we initially thought of COVID-19 as a new layer of risk, there has been so much change in the way we go about our lives that we now need to consider each nation’s new actuarial normal as a whole.
Actuaries have a long history of quantifying mortality and morbidity in terms of standard tables with personal drivers of age, sex, smoking habits, medical information, occupation, and high risk pastimes. While this framework is still useful for identifying similar cohorts, we need to be open to other dimensions in considering the impact of COVID-19.
Medical interventions
Vaccination has been a strong driver of lower mortality and morbidity, but progress has stalled in some nations and subgroups. The US, the UK and Israel had the best early access, but have been surpassed by more than 30 nations. Vaccine refusal is more prevalent in nations experiencing other forms of national suspicion, as shown by politically motivated vaccine controversy in the US. Actuaries will need to objectively consider the outlook for a nation to deliver vaccines. Poor delivery, vaccine refusal and fees will hurt experience, especially in vulnerable groups. Actuarial models should look at the promise of even better vaccines and the risk of vaccine controversy.
Human and physical geography
Actuaries are not accustomed to measuring population cohesion and homogeneity, but these will drive each nation’s endemic equilibrium. Besides the cross-impact on vaccine acceptance, societies that have more consensus on direction will be more co-operative with safety measures (for example masks, testing and tracing, social distancing and isolation protocols), whether they are mandatory or recommended. Nations with extremes of rich and poor will disagree on the balance between government-supported COVID-19 safety versus returning the economy to normal.
External and internal mobility is crucial. Island nations and closed societies can move quickly to tighten borders when they need time to defend against an oncoming wave, whereas international hubs such as the UK and Singapore, with their dense, mobile populations, have less time to anticipate each wave. Internally, each nation has its own mobility profile. Geography and poor transportation inhibit mobility in areas of Africa, for instance. Ordinarily mobile nations have made permanent shifts toward more home working and less public transportation use (more so in professional occupations).
Population density is important for the same reason as mobility, since dense populations make contact more inevitable and transmission more rapid. Singapore, with a population density of almost 8,000 per square kilometre, saw Omicron spread rapidly, after good defence against earlier variants. A robust actuarial model would look at the percentage of the population living in areas of high, medium and low density, since every nation has urban and rural areas.
Climate will determine different endemic equilibria, since we have already seen that COVID-19 exhibits flu-like seasonality, with increased transmission in cool, dry conditions. Humid areas experience a lower R number for transmission. Climate will drive the severity of waves and their speed of emergence.
Strategy
Political organisation will drive results. While a variety of forms of government can deliver services under ordinary conditions, the pandemic phase of COVID-19 has tested the effectiveness of various governments. Stable governments will form adaptive yet coherent strategies. Strategy is key, because each nation (and often sub-units of nations) will need to make the most of their unique circumstances. For instance, Singapore is an island nation with a highly urban, dense population that is accustomed to active government controls. Singapore will probably continue to slow the emergence of waves through border controls, and aggressively promote vaccination and mandatory safety measures. New Zealand has followed a strategy of dropping restrictions in each region when that region reaches 90% vaccination of the eligible population.
One key element of political structure is a country’s national health system, as this determines how COVID-19 vaccines, tests and treatments are distributed, as well as who bears the expense. The resilience of a national healthcare system can dictate strategy. The UK and Singapore were able to mobilise temporary hospitals quickly in unused buildings such as warehouses and exhibition halls, whereas New Zealand has relied on other defences to avoid waves altogether and has not significantly increased hospital capacity.
Since COVID-19 has more impact on those who are already at higher risk, long-range experience will be driven by each nation’s approach to the vulnerable. For example, the strategy for protecting the elderly in care homes mirrors a dense island nation that protects the borders and builds internal defences, while elderly people living in separate private homes may have less access to professional services but also less random exposure.
Outcomes
Once we have defined cohorts and considered medical, geographic and strategic factors, overall assumptions will come from assessing complex interactions between these factors.
It’s becoming meaningless to count COVID-19 tests, positives and death rates separately from knock-on effects. Excess mortality from all causes takes into account unidentified COVID-19 deaths and the net effect on other causes of mortality and morbidity.
However, measurement should go beyond mortality and morbidity. There are legitimate questions about what each society values. Should more value be placed on keeping up economic activity than on providing safety from COVID-19? Hopefully, a new balance of freedoms will incorporate good habits such as mask-wearing in crowds and staying home from work when sick. Ultimately, there will need to be a balance between COVID-19 safety and economic health and mental wellbeing, in the same way that there is for the flu.
Finally, the forward-looking actuary will realise that many of the national characteristics and strategies that improve experience in a world of endemic COVID-19 will also enable nations to improve experience with other diseases. We have experienced a pandemic that is becoming endemic, which will affect every nation differently, but we have also experienced a ‘moonshot’ in developing vaccines and treatments, which will provide benefits we have not begun to unpack. The one certainty is that actuaries will be needed to analyse more volatile mortality and morbidity assumptions in creative and robust ways.
Kate Dron is chief and appointed actuary with Partners Life in New Zealand
Alvin Fu is chief corporate solutions officer with AIA Singapore
Randall Wright is a product actuary with Monument Re in the UK and an honorary associate professor with Swansea University
