It is called the Covid-19 Actuaries Response Group, which might convey images of a rifle in one hand and a scientific calculator in the other. But its membership includes Louis Rossouw and Peter Temple, who run Gen Re in SA, making them the local representatives of Warren Buffett’s Berkshire Hathaway group.
Gen Re is one of the leading life and health reinsurers in SA.
And Temple, when he was president of the Actuarial Society of SA, had the rare gift of making actuarial science interesting for the layman.
Rossouw has written a paper comparing the UK and SA experience of the pandemic. There was a month’s delay before SA experienced the pandemic (late January for the UK, March 1 for SA) which allowed for a lockdown earlier in the process. According to the paper, SA is likely to experience fewer deaths than the UK because of its younger population, offset to some extent by a much higher incidence of chronic conditions such as HIV/Aids and TB. In the melancholy language of actuaries, SA will have relatively more years of (productive) life lost per death. In SA the average victim will die 18.5 years before their actuarially projected demise, and in the UK death will be 13 years early.
According to the paper, SA is likely to experience fewer deaths than the UK, because of its younger population
Rossouw also argues that SA’s cases could be undercounted, as there have been 3.7 tests per 1,000 compared with 11.2 in the UK. But even taking this into account, the pandemic has been significantly more severe in the UK.
The widely reported Imperial College London projection predicted that with no interventions, the UK death rate would rise to a shade below 600,000, and in SA to about 220,000. In SA’s case, mortality is likely to fall between the early and late suppression rates (driven by lockdown) of between 15,000 and 90,000. In the UK it is already well ahead of the projection of 21,000 — what it could have been with an early lockdown. Imperial’s projection, given that the UK had a late lockdown, is for 120,000 deaths, well ahead of its European neighbours and much higher per capita than the US, which has about six times the UK’s population.
SA was hardly in a positive mood as we moved into 2020. Downgrades by the ratings agencies seemed, and of course were, inevitable. Eskom was, and remains, a crippling mess. Rossouw says the economic impact is apparent but the pandemic impact is hardly felt.
In contrast, almost everyone in the UK knows somebody who got sick with Covid-19, and an increasing number have seen loved ones die. And economically, the country is coming off a base in which unemployment was just 4%, while the resources to compensate business for closure are incomparably larger than in SA.
Ventilator demand overestimated
Rossouw says SA’s exit strategy from lockdown is rational; there is a framework for data-driven decision-making on when to move between lockdown levels as well as a focus on screening. But Imperial predicts SA will reach a peak of deaths of 800 a day only in mid-September, while the UK will hit a peak of 1,200 a day about two weeks earlier. This is based on a lockdown at 50% of the effectiveness of SA’s level 4 arrangement.
Temple says we have had to adapt our thinking on the virus. For example, the demand for ventilators has been overestimated and has been running at about half of projections. And many of the field hospitals set up in exhibition centres and on hospital ships, fantastic PR stunts, have also been closed. The pandemic lacks the drama of the Hollywood outbreak genre. It is more of a prolonged human tragedy.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.