Coronavirus Exam Question
Channel: MJ the Fellow Actuary
Date: 2020-03-30

Much of the risk from a pandemic stems from currently unknown viruses and diseases meaning that the additional impact on mortality and morbidity cannot be estimated with any degree of accuracy. As such the usual approach of building a model to forecast losses based on inputs does not work because the inputs are not known. Accordingly the life insurance company has decided to use the model in reverse. It will choose a total loss amount and then analyse the inputs and processes that would produce it.