Here’s a Wired arti­cle from back in June of 2020 that delves into one of the more fas­ci­nat­ing aspects of Metabio­ta’s busi­ness mod­el: the com­pa­ny’s role in the pan­dem­ic insur­ance indus­try. As we’re going to see, it was a remark­able role in a num­ber of ways, includ­ing some remark­able appar­ent luck. The kind of luck that, in part, can be engi­neered in a lab.

As was described in Alex­is Baden-May­er’s arti­cle on Metabio­ta’s work relat­ed to gain-of-func­tion research and the inter­na­tion­al net­work of researchers work­ing with the Eco­Health Alliance, Metabio­ta as ini­tial­ly the Glob­al Viral Fore­cast­ing Ini­tia­tive (GVFI), a non-prof­it aca­d­e­m­ic effort at set­ting up research out­posts around the world to track region­al “viral chat­ter” and pre­dict when the next glob­al pan­dem­ic is about it hit. It was the GVFI that even­tu­al­ly mor­phed into the for-prof­it Metabio­ta and went on to work close­ly with the Eco­Health Alliance’s PREDICT pro­gram. Recall how the PREDICT pro­gram was one of the Eco­Health Alliances major sources of gov­ern­ment grants. So when we’re talk­ing about the work of the GVFI and Metabio­ta, it real­ly should be seen as Big Data com­po­nent of this larg­er col­lab­o­ra­tion cen­tered around PREDICT.

But as we’re going to see, there was anoth­er area of inter­est for Metabio­ta that was sep­a­rate from its with PREDICT and the Eco­Health alliance. Sep­a­rate and yet deeply relat­ed: Metabio­ta’s Big Data capac­i­ty for pre­dict­ing emerg­ing pan­demics was­n’t just being used by the PREDICT ini­tia­tive. Start­ing in 2013, Metabio­ta began part­ner­ing with Ger­man rein­sur­ance giant Munich Re to begin work­ing on what would even­tu­al­ly become a kind of pan­dem­ic insur­ance cov­er­age offered to busi­ness. Metabio­ta’s pan­dem­ic pre­dic­tion tools were used to cre­ate glob­al pan­dem­ic indices, and once the index crossed a thresh­old lev­el, Munich Re would have to pay out to those enti­ties cov­ered by the insur­ance. Metabio­ta was oper­at­ing as a kind of inde­pen­dent third-par­ty who would assess the sever­i­ty of the pan­dem­ic for deter­min­ing whether or not pay­outs on pan­dem­ic cov­er­age was war­rant­ed. It sounds like Munich Re has pre­vi­ous­ly be plan­ning on using the WHO’s “pan­dem­ic phas­es” assess­ment for deter­min­ing the sever­i­ty of a pan­dem­ic for these insur­ance poli­cies, but some time in 2013 the WHO aban­doned that sys­tem for a more vague sys­tem that did­n’t have clear­ly delin­eat­ed stages of sever­i­ty. That was year Munich Re reached out to Metabio­ta.

While the idea of pan­dem­ic insur­ance might seem like an obvi­ous solu­tion for busi­ness­es, there are rea­sons it isn’t already wide­spread exists. For starters, it’s dif­fi­cult to get busi­ness­es to sign up for cov­er­age against some­thing that’s often seen as a ‘once in 100 years’ event. That obvi­ous­ly isn’t a prob­lem now, but pre-COVID, that was indeed a prob­lem for the insur­ance indus­try, includ­ing for Munich Re and Metabio­ta who were offer­ing this cov­er­age lit­er­al­ly right before the pan­dem­ic, start­ing in mid-2018. So pan­dem­ic insur­ance was avail­able to busi­ness­es for a year and a half before the pan­dem­ic. But vir­tu­al­ly no one bought their insur­ance before the pan­dem­ic. We’re told only one com­pa­ny bought it, although we aren’t told which com­pa­ny or how much they were paid. It was an exam­ple of the remark­able luck expe­ri­enced by Metabio­ta and Munich Re: they would have lost big if they had to almost imme­di­ate­ly pay out. But they dodged that bul­let. And in the process the great­est adver­tise­ment for the prod­uct tran­spired in the form of the pan­dem­ic and inter­est in the insur­ance has sky­rock­et­ed. The appar­ent luck was just astound­ing.

There’s anoth­er rea­son pan­dem­ic insur­ance is so atyp­i­cal: pan­dem­ic insur­ance might make sense from the stand­point of a busi­ness, but it does­n’t make busi­ness sense for insur­ance com­pa­nies. That’s because pan­demics strike every­one at once, which makes pan­demics a very dif­fer­ent form of cat­a­stro­phe for an insur­ance com­pa­ny to pro­vide cov­er­age against vs cov­er­age for some­thing like hail that’s only going to impact a par­tic­u­lar region at any giv­en point. The busi­ness mod­el for pan­dem­ic insur­ance does­n’t make sense. So Munich Re found a way to make it make busi­ness sense: by sell­ing off the risk of a pan­dem­ic to investors. The idea is that Munich Re will pay investors each year there isn’t a pan­dem­ic. But when a pan­dem­ic does hit, those investors will have to pay out to Munich Re to help cov­er the costs. So as long as Munich Re can find investors who are will­ing to take a rel­a­tive­ly bad bet, the com­pa­ny can effec­tive­ly offload the cost of pan­dem­ic pay­outs.

Oh, and guess which par­tic­u­lar investor class they had in mind: pen­sion funds. As we’ve seen, pen­sion funds hun­gry for high­er yields have already been an avid investor in the pri­vate equi­ty sec­tor. So it looks like mak­ing pan­dem­ic bets might be part of their future too. The idea is that a pan­dem­ic is going to selec­tive­ly kill off the elder­ly, eas­ing the cost bur­den on pen­sion funds.

So in addi­tion to Metabio­ta exten­sive work with the inter­na­tion­al net­work of researchers involved with gain-of-func­tion research on coro­n­avirus­es, it was also play­ing a key role in devel­op­ing a whole new pan­dem­ic insur­ance mar­ket­place with Munich Re. And that brings us to anoth­er fas­ci­nat­ing fun fact: We’re told that part of what make the emer­gence of the coro­n­avirus pan­dem­ic so remark­able for Metabio­ta is that the com­pa­ny had run a large set of sce­nar­ios fore­cast­ing the con­se­quences of a nov­el coro­n­avirus spread­ing around the globe two years pri­or. Which rais­es the fas­ci­nat­ing ques­tion: so did Metabio­ta fac­tor in the risk of a lab leak in its risk mod­els? It was lit­er­al­ly work­ing with a net­work of researchers work­ing on gain-of-func­tion coro­n­avirus research, so it’s not like Metabio­ta was­n’t aware it was hap­pen­ing. And that gets as what is per­haps the most remark­able part of this whole sto­ry: the com­pa­ny that was play­ing a key pan­dem­ic infor­mat­ics role for this insur­ance sec­tor was also deeply involved with the net­works of researchers build­ing nov­el virus­es in the lab. Some might con­sid­er that a con­flict of inter­est:

Wired

We Can Pro­tect the Econ­o­my From Pan­demics. Why Did­n’t We?
A virol­o­gist helped crack an impos­si­ble prob­lem: how to insure against the eco­nom­ic fall­out from dev­as­tat­ing viral out­breaks. The plan was inge­nious. Yet we’re still in this mess.

Evan Ratliff
06.16.2020 06:00 AM

“It’s real­ly a 100-year thing,” Nathan Wolfe said. It was 2006, and Wolfe, then a 36-year-old virol­o­gist with an unruly nest of curly hair, was sit­ting across a table from me at a bustling restau­rant in Yaoundé, the cap­i­tal of Cameroon. An epi­demi­ol­o­gy pro­fes­sor at UCLA, he had been liv­ing in West Africa for six years, estab­lish­ing a research cen­ter to iden­ti­fy and study virus­es as they crossed over from wild ani­mals into humans.

That night Wolfe told me he was form­ing a net­work of research out­posts around the globe, in hot spots where poten­tial­ly dev­as­tat­ing virus­es were poised to make the jump: Cameroon, where HIV like­ly passed from chim­panzees into local hunters; the Demo­c­ra­t­ic Repub­lic of Con­go, which had seen human out­breaks of mon­key­pox; Malaysia, home to a 1998 emer­gence of the Nipah virus; and Chi­na, where SARS-CoV had crossed over, like­ly from bats, in 2002. Wolfe’s hope was that by under­stand­ing what he called the “viral chat­ter” of such places, it would be pos­si­ble not only to react more quick­ly to out­breaks but to fore­cast their arrival and stop them before they spread. The “100-year thing” he was think­ing about was a glob­al pan­dem­ic, and how his­to­ry would judge human­i­ty’s efforts to pre­pare for it. His biggest fear, he said, was a virus unknown to human immune defens­es start­ing a human-to-human trans­mis­sion chain that would encir­cle the globe.

As we knocked back Cameroon­ian beers and talked between sets of a local band, he admit­ted his project could fail. “It could be that we look at this and it’s stochastic—you can’t pre­dict it,” he said. “Or, it could be that we are on the edge of a par­a­digm shift.” The ulti­mate ques­tion, Wolfe added, was “Will peo­ple look back and say you did a good job respond­ing to epi­demics, but you did­n’t do any­thing to pre­vent them?” The 100-year notion so cap­ti­vat­ed me that I used it as the last line of a sto­ry I wrote in 2007, in this mag­a­zine.

Thir­teen years lat­er, as the SARS-CoV­‑2 virus burned across the globe this March, it appeared that the 100-year judg­ment had arrived. We’d failed both at pre­vent­ing the exact dan­ger Wolfe had warned us about and at respond­ing when it emerged. He was­n’t the only pan­dem­ic Cas­san­dra, of course. Not even close. Sci­en­tists, jour­nal­ists, and pub­lic health experts had sound­ed the alarm for decades, fill­ing jour­nals, gov­ern­ment reports, and pop­u­lar books with their pleas. There were con­fer­ences, com­mis­sions, hear­ings, exer­cis­es, con­sor­tiums. Every few years anoth­er near-miss epi­dem­ic emerged that cried out for long-term prepa­ra­tion.

But Wolfe was the Cas­san­dra I’d known, and I could­n’t help won­der­ing what it felt like to be liv­ing through the pan­dem­ic you pre­dict­ed. We had cor­re­spond­ed a few times since 2007, and I’d fol­lowed his career spo­rad­i­cal­ly as he start­ed a com­pa­ny called Metabio­ta. As best I could gath­er, he had trans­ferred his orig­i­nal idea of a dis­ease sur­veil­lance net­work into a kind of epi­demi­o­log­i­cal data com­pa­ny.

I dug up his email and wrote to him. “It must be a strange sen­sa­tion,” I said, “to have been ter­ri­bly right about some­thing you did­n’t want to be right about.”

...

Nor was he par­tic­u­lar­ly inter­est­ed in cast­ing blame—in offer­ing an I‑told-you-so from the intre­pid virus hunter. “Plen­ty of peo­ple can speak to that,” he said. “It’s like Good Vibra­tions: I don’t want to play that any­more. I have a new record.” Now 49, Wolfe had trad­ed the Cameroon­ian jun­gle for the con­fer­ence rooms of Sil­i­con Val­ley. When I saw him on Zoom, his shoul­der-length locks were gone, and his quar­an­tine beard was shot through with gray. But he had the same glow of enthu­si­asm I remem­bered. His new pre­oc­cu­pa­tion, he told me, was pan­dem­ic insur­ance.

I’ll con­fess this did­n’t imme­di­ate­ly pique my inter­est. The word insur­ance evokes in me feel­ings of tedi­um and loathing. Like many Amer­i­cans, my per­son­al inter­face with the indus­try has, let’s just say, been less than pos­i­tive. But then Wolfe began to explain the unex­pect­ed direc­tion his career had tak­en. After years of think­ing about epi­demics in terms of the symp­to­matic and the dead, he’d begun con­sid­er­ing their eco­nom­ic ram­i­fi­ca­tions. A glob­al pan­dem­ic, and the steps we would take to stop it, would mean busi­ness clos­ings, lay­offs, and mass unem­ploy­ment. Prepar­ing to face an out­break, he’d come to believe, required antic­i­pat­ing those impacts.

This was where insur­ance came in, specif­i­cal­ly a kind of pan­dem­ic insur­ance policy—for busi­ness­es, and per­haps even for countries—that would pay out as soon as an epi­dem­ic reached a cer­tain thresh­old. In 2015, Metabio­ta had part­nered with Ger­man rein­sur­ance giant Munich Re and Amer­i­can insur­ance bro­ker­age Marsh to devel­op and sell a pol­i­cy specif­i­cal­ly to guard large busi­ness­es against pandemics—to stanch the finan­cial loss­es and keep them afloat. They’d launched it in mid-2018, a year and a half before the first Covid-19 cas­es appeared in Chi­na.

My sense of tedi­um evap­o­rat­ed. As Wolfe and I were talk­ing, a total eco­nom­ic lock­down was in place, with mil­lions of jobs dis­ap­pear­ing by the week and lines at food pantries stretch­ing by the hour. And here he was say­ing that they had come up with a kind of finan­cial vac­cine for exact­ly this sce­nario, released not long before the worst pan­dem­ic in a cen­tu­ry. It would­n’t stop the virus, of course, but it could help alle­vi­ate some of the mis­ery that flowed from it.

How must those CEOs feel, I won­dered aloud, who had the fore­sight to buy the world’s first pan­dem­ic busi­ness insur­ance? What a sto­ry they would have to tell.

There was just one prob­lem. “By and large we failed,” Wolfe said. “Not because we did­n’t do the mod­els well. We enabled the first busi­ness-dis­rup­tion insur­ance for pan­demics. But nobody bought it.”

I was so stunned I called him up a few days lat­er to ask him again. Did he mean lit­er­al­ly nobody bought it?

“As far as I know, nobody bought the pol­i­cy,” he said.

It was a life insur­ance quandary that first got Gun­ther Kraut think­ing about pan­demics, near­ly a decade ago. A math­e­mati­cian by train­ing, Kraut was work­ing at Munich Re, one of the world’s largest rein­sur­ers. As it sounds, rein­sur­ance is the busi­ness of insur­ing insur­ers. The local and nation­al insur­ance com­pa­nies that you and I buy life or auto cov­er­age from—the Geicos and All­states of the world—need their own pro­tec­tion against rare but cat­a­stroph­ic events that might cre­ate enough claims to bank­rupt them. Rein­sur­ance com­pa­nies pro­vide that back­stop on insur­ance for every­thing from homes and infra­struc­ture projects to busi­ness loss­es and indi­vid­ual lives. Rein­sur­ance is a stag­ger­ing­ly lucra­tive endeav­or: Munich Re had $56 bil­lion in rev­enue and $3 bil­lion in prof­it last year. The mar­ket is large enough that its peren­ni­al com­peti­tor, Swiss Re, took in $49 bil­lion itself.

Kraut, sandy-haired and still slight­ly boy­ish-look­ing at 39, grew up near Munich, where the epony­mous com­pa­ny has dom­i­nat­ed the eco­nom­ic land­scape since its found­ing in 1880. He talks about the intri­ca­cies of under­writ­ing with a friend­ly patience that implies he has done so count­less times before, none of which have dimmed his pas­sion. He grav­i­tat­ed toward math at uni­ver­si­ty, and, he told me, “it’s hard to study math­e­mat­ics in Munich with­out ever learn­ing about the exis­tence of rein­sur­ance com­pa­nies.” After com­plet­ing his PhD in risk man­age­ment and insur­ance at Lud­wig-Max­i­m­il­ians Uni­ver­si­ty, he took a job as a quan­ti­ta­tive ana­lyst in Munich Re’s life insur­ance divi­sion in 2007. “Rein­sur­ance is some­times called the busi­ness of a hun­dred pro­fes­sions,” he said. “Because you don’t just have math­e­mati­cians and lawyers and busi­ness­men. You have for­mer min­ing engi­neers. You have for­mer cap­tains who steered ships across the ocean. You have art experts who are spe­cial­ized in art insur­ance. It is, if you like, always close to life. Admit­ted­ly with a lit­tle bit of this neg­a­tive view on it.”

Munich Re—a com­pa­ny built to absorb the risk of others—had a risk prob­lem of its own: name­ly, the pos­si­bil­i­ty of a glob­al pan­dem­ic. Insur­ance is essen­tial­ly the busi­ness of quan­ti­fy­ing risk and then smooth­ing it out. But for a world­wide out­break, the math in its life insur­ance port­fo­lio looked wor­ry­ing even to Kraut and his col­leagues, who spent their careers pon­der­ing the dark­est risks. In late 2011, Kraut’s team decid­ed to try to do some­thing about it.

“Let’s take the exam­ple of Munich and car insur­ance,” Kraut told me. “That’s a very, very sta­ble busi­ness.” A local com­pa­ny might insure tens of thou­sands of cars, each with a cer­tain prob­a­bil­i­ty of hav­ing a small acci­dent. “You can pre­dict very well how much mon­ey you will have to pay on the claim set­tle­ments, and hence how much pre­mi­um you will need to col­lect,” he said. But let’s say that one year there is a freak­ish­ly large hail­storm in Bavaria, dam­ag­ing half the cars in the port­fo­lio. The result­ing claims could be an extinc­tion-lev­el event for an insur­ance com­pa­ny. Such storms may occur sta­tis­ti­cal­ly only once every three decades—a one-in-30-year event, in risk parlance—but every car insur­ance com­pa­ny would have to keep enough cash on hand to pay out on claims on half its cars, just in case. “That’s a lot of mon­ey you need to put aside for some­thing that hap­pens very rarely,” Kraut said.

Now con­sid­er an auto insur­er in Paris with the same prob­lem: a fleet of cars, a pre­dictable num­ber of acci­dents, the threat of a one-in-30-year hail­storm event. Here­in lies the math­e­mat­i­cal advan­tage of rein­sur­ance. If Munich Re pledges to cov­er both com­pa­nies against freak­ish hail­storms, “what we can assume with a high chance is that there will be hail­storms in Paris, there will be hail­storms in Munich, but most like­ly they will not hap­pen in the same year,” Kraut said. That means Munich Re can set aside less mon­ey to pre­pare for a rare event. Even bet­ter: The more car insur­ers that Munich Re adds to its port­fo­lio, in more geo­graph­i­cal regions, the more it can con­vert a rare and expen­sive risk into a pre­dictable and cheap­er one for itself. In insur­ance it’s called diver­si­fi­ca­tion. “The more that you can spread the risk, the bet­ter for mak­ing it insur­able,” Kraut said. “That’s why rein­sur­ance com­pa­nies are glob­al com­pa­nies.”

The math applies to oth­er insur­ance “per­ils,” as they’re known—earthquakes, floods, wild­fires. And ordi­nary deaths, most of the time. But there­in lay the prob­lem for Kraut, who was part­ly respon­si­ble for mak­ing sure the com­pa­ny’s life insur­ance divi­sion did­n’t shoul­der unsus­tain­able risks. Local dis­ease out­breaks were like the hail­storms of life insur­ance: rare and dev­as­tat­ing region­al events that could be count­ed on to hap­pen at dif­fer­ent times in dif­fer­ent locales. “Now you quick­ly see the prob­lem with insur­ing pan­dem­ic risk, because a pan­dem­ic is by def­i­n­i­tion a glob­al event,” Kraut said. Imag­ine a hail­storm spread­ing from town to town, across the globe, in a cat­a­clysmic chain: “The whole con­cept of glob­al diver­si­fi­ca­tion does­n’t work out any­more.” An out­break on the scale of the 1918 flu—50 mil­lion dead worldwide—might be a one-in-500-year risk, an event way out on the tail of a prob­a­bil­i­ty curve. But a pan­dem­ic at that scale, or even one con­sid­er­ably small­er, could not only over­whelm life insur­ance com­pa­nies but Munich Re too.

To tack­le Munich Re’s expo­sure, Kraut’s team began attempt­ing to quan­ti­fy and price this incred­i­bly remote, unpre­dictable risk. If they man­aged to do that, they would then need to sell part of that risk—to find some­one will­ing to insure the rein­sur­er. “No one real­ly had tried to do a trans­ac­tion at a one-in-500-year return peri­od,” Kraut said. His boss gave it a 50–50 chance of suc­cess.

But over the course of two years, the group grad­u­al­ly built up a list of poten­tial buy­ers. It turned out that there were a few large insti­tu­tion­al investors look­ing to diver­si­fy their own port­fo­lios, and a lit­tle bit of pan­dem­ic risk was just the thing. Munich Re would pro­vide them with annu­al pay­ments, year after year. In the rare event of a pan­dem­ic, they would have to cov­er Munich Re’s loss­es. One inter­est­ed class of investor—if a macabre one—was pen­sion funds, which typ­i­cal­ly grap­ple with some­thing called longevi­ty risk: the chance that peo­ple will live longer than expect­ed. “It’s not real­ly good ter­mi­nol­o­gy to call it a ‘risk,’ ” Kraut said. “It’s a good thing, tech­ni­cal­ly! But if peo­ple live a lot longer than expect­ed, then a pen­sion fund needs to pay out a lot more pen­sions than they orig­i­nal­ly cal­cu­lat­ed.” A dead­ly pan­dem­ic that takes the lives of pen­sion­ers, to put it in the most clin­i­cal terms, means few­er years of pen­sion pay­outs, can­cel­ing some of the longevi­ty risk. Should no pan­dem­ic arise, they would pock­et pay­ments from Munich Re. By 2013, Kraut and his team had put togeth­er enough investors—starting with a large Aus­tralian pen­sion fund—to take some of the pan­dem­ic prob­lem off of Munich Re’s books. But he soon encoun­tered an unex­pect­ed hitch: The mech­a­nisms writ­ten to trig­ger the deal relied on a series of “pan­dem­ic phas­es” mon­i­tored by the World Health Orga­ni­za­tion. (Phase 1: Virus is cir­cu­lat­ing in ani­mals. Phase 2: Reports of human infec­tion. Phase 3: Human-to-human trans­mis­sion. And so on up to Phase 6: Sus­tained out­breaks in mul­ti­ple regions.) Some­time in 2013, how­ev­er, the WHO aban­doned this sys­tem for a less spe­cif­ic four phas­es. Kraut sud­den­ly need­ed some oth­er orga­ni­za­tion to delin­eate the stages of epi­demics reli­ably enough to write into an insur­ance pol­i­cy. And he need­ed some­one to mon­i­tor epi­demics close­ly, to know when they hit agreed upon triggers—illnesses, deaths, spread. “But you can’t just hire the WHO,” he said.

In study­ing up on the world of epi­demi­ol­o­gy, Kraut hap­pened to have picked up a book called The Viral Storm. It was writ­ten by Nathan Wolfe. Part mem­oir, part pre­scrip­tion, the book laid out a vision for how to counter the threat that nov­el virus­es rep­re­sent to humans. Kraut looked up Wolfe and saw that he’d formed a com­pa­ny. “I thought, oh, maybe these guys actu­al­ly can do it,” he said. He sent an email to info@metabiota.com. “Hel­lo, have you ever heard of a rein­sur­ance com­pa­ny? I might have a good rea­son to talk to you.”

As it hap­pened, Wolfe was already think­ing about the busi­ness shocks of pan­demics when Kraut’s email arrived in Metabio­ta’s inbox in 2013. By this time, Wolfe’s pub­lic pro­file as an Indi­ana Jones-like virus hunter had been well estab­lished. He’d been fea­tured on CNN and had giv­en the oblig­a­tory TED talks. He’d walked away from his tenured posi­tion at UCLA, moved to San Fran­cis­co, and found­ed Metabio­ta. Wolfe lever­aged his aca­d­e­m­ic work into the pri­vate sec­tor, using the data from his net­work of research sta­tions to con­duct dis­ease sur­veil­lance for clients. For years, the com­pa­ny sub­sist­ed large­ly on gov­ern­ment con­tracts, includ­ing more than $20 mil­lion from the Depart­ment of Defense and aid agen­cies involved in man­ag­ing epi­dem­ic out­breaks. Metabio­ta also part­nered with the for­eign assis­tance agency USAID on a project called Pre­dict, help­ing to build a data­base cat­a­loging virus­es in their ani­mal reser­voirs and fore­cast­ing which ones might jump to humans. “There was some suc­cess,” Wolfe told me. “Some mon­ey was put into pre­dic­tion and pre­ven­tion. Not enough, obvi­ous­ly.”

As Wolfe start­ed to appear on stages along­side busi­ness lead­ers, he became con­vinced that the com­mer­cial sec­tor had seri­ous­ly under­es­ti­mat­ed epi­dem­ic risk. In 2010 he sat on a pan­el at Davos called “Pre­pare for a Pan­dem­ic.” In advance of the talk, the orga­niz­ers cir­cu­lat­ed a sur­vey show­ing that while 60 per­cent of CEOs believed the threat of a glob­al out­break was real, only 20 per­cent had an emer­gency plan in place. That same year he’d been invit­ed to a cruise indus­try con­fer­ence. He’d tried, with­out luck, to con­vince exec­u­tives that Metabio­ta could help them avoid the hav­oc of an epi­dem­ic. “I felt like nobody was pay­ing atten­tion to it,” he said.

Then Gun­ther Kraut’s email arrived. Kraut and Wolfe met up at a con­fer­ence in Munich and began riff­ing. Soon Metabio­ta was pro­vid­ing dis­ease mon­i­tor­ing for Munich Re’s life insur­ance divi­sion.

Kraut, how­ev­er, had an even more ambi­tious idea in mind. What if, instead of sim­ply hedg­ing its own life insur­ance busi­ness in the case of a pan­dem­ic, Munich Re could use the same con­cept to insure oth­er busi­ness­es against them? Busi­ness inter­rup­tion insur­ance, the poli­cies that pro­tect com­pa­nies against income loss­es from dis­as­ters like fires or hur­ri­canes, often explic­it­ly exclud­ed dis­ease. (And when it did­n’t, insur­ers could still use the ambi­gu­i­ty to deny claims.) The risk was thought to be too large, too unpre­dictable to quan­ti­fy. But Munich Re had already proven it could cov­er its own life insur­ance risk in pan­demics, and now it had a part­ner in Metabio­ta that spe­cial­ized in seem­ing­ly unpre­dictable out­breaks. What if they could cre­ate and sell a busi­ness inter­rup­tion insur­ance pol­i­cy that cov­ered epi­demics, start­ing with acute­ly vul­ner­a­ble indus­tries like trav­el and hos­pi­tal­i­ty? They could then pass on the pay­out risk from those poli­cies to the same types of investors who had bought their life risk. “There is a bit of finan­cial alche­my to the whole thing,” Wolfe told me lat­er. “You real­ly are cre­at­ing some­thing from noth­ing.”

At the same time, Wolfe had been work­ing to oper­ate Metabio­ta more like a tech­nol­o­gy com­pa­ny. In 2015, he hired Nita Mad­hav, an epi­demi­ol­o­gist who’d spent 10 years mod­el­ing cat­a­stro­phes at a com­pa­ny called AIR World­wide, one of a hand­ful of firms the insur­ance indus­try relies on to com­pute extreme risks. (Munich Re, in fact, had worked with AIR epi­demi­o­log­i­cal mod­els in its life insur­ance cal­cu­la­tions.) Mad­hav’s man­date at Metabio­ta was to build the indus­try’s most com­pre­hen­sive pan­dem­ic mod­el. Her team, which even­tu­al­ly grew to include data sci­en­tists, epi­demi­ol­o­gists, pro­gram­mers, actu­ar­ies, and social sci­en­tists, began by painstak­ing­ly gath­er­ing his­tor­i­cal data on thou­sands of major dis­ease out­breaks dat­ing back to the 1918 flu. Her col­leagues had recent­ly cre­at­ed what they called the Epi­dem­ic Pre­pared­ness Index, an assess­ment of 188 coun­tries’ capac­i­ty to respond to out­breaks. Togeth­er, the two efforts informed an infec­tious dis­ease mod­el and soft­ware plat­form. A user could begin with a set of para­me­ters around a hypo­thet­i­cal virus—its geo­graph­ic ori­gin point, how eas­i­ly it was trans­mit­ted, its virulence—and then run sce­nar­ios explor­ing how the dis­ease spread around the world. The goal was a mod­el that could, for exam­ple, help a man­u­fac­tur­er under­stand how a dis­ease might impact its sup­ply chain or a drug com­pa­ny plan for how a treat­ment would need to be dis­trib­uted.

As sophis­ti­cat­ed as Metabio­ta’s sys­tem was, how­ev­er, it would need to be even more refined to incor­po­rate into an insur­ance pol­i­cy. The mod­el would need to cap­ture some­thing much more dif­fi­cult to quan­ti­fy than his­tor­i­cal deaths and med­ical stock­piles: fear. The eco­nom­ic con­se­quences of a scourge, the his­tor­i­cal data showed, were as much a result of soci­ety’s response as they were to the virus itself.

The group start­ed build­ing what became known as the Sen­ti­ment Index. Ben Oppen­heim, head of the prod­uct team and a polit­i­cal sci­en­tist, had stud­ied the work of Paul Slovic, a Uni­ver­si­ty of Ore­gon psy­chol­o­gy pro­fes­sor who stud­ied how human beings per­ceive and respond to risk. Inspired by Slovic’s data-dri­ven approach, they gath­ered their own infor­ma­tion from around the world on how much var­i­ous symp­toms fright­ened peo­ple. To val­i­date their mea­sures, they also began track­ing and study­ing how media cov­er­age evolved around dif­fer­ent types of out­breaks. Scari­er dis­eases tend­ed to gen­er­ate more news sto­ries.

...

The Sen­ti­ment Index was built to be, as Oppen­heim put it, “a cat­a­log of dread.” For any giv­en pathogen, it could spit out a score from 0 to 100 accord­ing to how fright­en­ing the pub­lic would find it. That num­ber could then be used to help cal­cu­late the pos­si­ble finan­cial loss­es from an epi­dem­ic, every­thing from emp­ty hotels to post­poned min­ing projects. Mad­hav and her team, along with Wolfe and Oppen­heim, also researched the broad­er eco­nom­ic con­se­quences of dis­ease out­breaks, mea­sured in the “cost per death pre­vent­ed” incurred by soci­etal inter­ven­tions. “Mea­sures that decreased per­son-to-per­son con­tact, includ­ing social dis­tanc­ing, quar­an­tine, and school clo­sures, had the great­est cost per death pre­vent­ed, most like­ly because of the amount of eco­nom­ic dis­rup­tion caused by those mea­sures,” they wrote in a 2018 paper.

By then, the Sen­ti­ment Index had been test­ed against Metabio­ta’s data­base of his­tor­i­cal pan­demics, and Munich Re began incor­po­rat­ing it into a busi­ness inter­rup­tion pol­i­cy. Gun­ther Kraut’s group was then oper­at­ing as a stand-alone unit called Epi­dem­ic Risk Solu­tions, with groups in Sin­ga­pore, Munich, and Lon­don. The promise, for both com­pa­nies, was enor­mous. Metabio­ta had raised $30 mil­lion via ven­ture fund­ing in 2015, part­ly on the idea that pro­vid­ing the tech­nol­o­gy behind pan­dem­ic cov­er­age could be a growth busi­ness. There was, after all, only so much a gov­ern­ment agency might pay Metabio­ta for dis­ease sur­veil­lance; the uni­verse of large busi­ness­es that could suf­fer loss­es from a major pan­dem­ic, how­ev­er, was near­ly lim­it­less. Munich Re had a chance to cre­ate an entire­ly new seg­ment of the insur­ance mar­ket, for a risk that exist­ed in lit­er­al­ly every part of the globe.

...

Munich Re was­n’t the only com­pa­ny look­ing for a bit of finan­cial alche­my. The US insur­ance firm Marsh had been grap­pling with the same ques­tion for its cus­tomers. Like Oppen­heim at Metabio­ta, Chris­t­ian Ryan had per­son­al rea­sons to be struck by the finan­cial con­se­quences of the Zika out­break. “My father was a hote­lier down in Brazil,” said Ryan, the head of Marsh’s hos­pi­tal­i­ty, sports, and gam­ing divi­sion. When the dis­ease began spread­ing in 2016, his dad lost a sig­nif­i­cant amount of his busi­ness and even­tu­al­ly sold the hotel for a frac­tion of the price he once could have got­ten. “It just showed how frag­ile hos­pi­tal­i­ty was. Because it’s pred­i­cat­ed on peo­ple con­tin­u­ing to show up and feel safe and feel secure.”

Ryan and his col­leagues went look­ing for some­one who might have mod­eled out the risk, and like Munich Re, they end­ed up on Metabio­ta’s doorstep. Soon Marsh had formed a three-way part­ner­ship with Wolfe’s com­pa­ny and Munich Re. Marsh would sell the insur­ance under the name Pathogen­RX. (Munich Re set up sim­i­lar sales rela­tion­ships in oth­er parts of the world.) The poli­cies would be tai­lored for each com­pa­ny, but most would con­tain what’s called a para­met­ric solu­tion: a pre­set amount of cov­er­age that could auto­mat­i­cal­ly pay out when the epi­dem­ic reached cer­tain thresh­olds, giv­ing com­pa­nies an infu­sion of cash with­out the delays of fil­ing a claim.

The mar­ket­ing mate­ri­als for the pol­i­cy now read like a let­ter from 2020. To the air­line and hos­pi­tal­i­ty indus­tries, they warned that “these out­breaks have had wide­spread impact on per­son­al and busi­ness trav­el.” For sports teams and leagues, they cau­tioned, “indi­vid­u­als must be able to par­tic­i­pate in and attend events with­out fear for their safe­ty and health. Pan­dem­ic out­breaks can dis­rupt pub­lic con­fi­dence, and in turn, make or break many com­pa­nies.”

But sell­ing the insur­ance meant first per­suad­ing risk man­agers and chief risk officers—the fig­ures respon­si­ble for insur­ance cov­er­age at large corporations—that pan­demics were a risk worth hedg­ing. Then the risk man­agers would need to per­suade their bosses—the CFOs and CEOs—to pony up for a new expense that was­n’t going to help the com­pa­ny’s quar­ter­ly bot­tom line.

...

On Decem­ber 31, 2019, Nita Mad­hav was in Port­land, Ore­gon, attend­ing a cous­in’s wed­ding. That sum­mer, after four years lead­ing the infec­tious dis­ease data sci­ence team, she’d tak­en over as CEO of Metabio­ta. Now she was enjoy­ing a hol­i­day away from the stress of run­ning a 60-plus-employ­ee com­pa­ny. Her extend­ed fam­i­ly had trav­eled from around the US and beyond to cel­e­brate the wed­ding and count down the last moments of 2019 togeth­er. But that morn­ing, before the cer­e­mo­ny, Mad­hav began get­ting texts from Oppen­heim telling her about a clus­ter of unusu­al pneu­mo­nia-­like infec­tions in Wuhan, Chi­na. The com­pa­ny’s ear­ly detec­tion sys­tem, which includ­ed an algo­rithm for pars­ing and high­light­ing news sto­ries about out­breaks, was flag­ging Wuhan as a poten­tial hot spot. The team typ­i­cal­ly looked at hun­dreds of media reports a week and approached new ones cau­tious­ly. At the recep­tion, Mad­hav mes­saged with Oppen­heim and won­dered: If it was res­pi­ra­to­ry, could the source be more like H7N9, the avian flu? A coro­n­avirus like SARS-CoV?

...

As the human and eco­nom­ic dev­as­ta­tion mul­ti­plied in tan­dem across the globe, Metabio­ta’s employ­ees sud­den­ly found them­selves liv­ing inside their own mod­el’s pro­jec­tions. Just two years ear­li­er, the com­pa­ny had run a large set of sce­nar­ios fore­cast­ing the con­se­quences of a nov­el coro­n­avirus spread­ing around the globe. “I guess part of what I’m strug­gling with emo­tion­al­ly is that it’s almost like we’ve been attacked by a cliché,” Oppen­heim told me lat­er. “No one can pre­dict the exact tim­ing and loca­tion and dynam­ics, but the broad con­tours are a sto­ry that peo­ple have walked through specif­i­cal­ly before.”

At the same time Metabio­ta was watch­ing the night­mare that its mod­els had antic­i­pat­ed unfold, Gun­ther Kraut was in Sin­ga­pore fac­ing a dif­fer­ent prob­lem. Where Munich Re’s epi­dem­ic solu­tions divi­sion had been strug­gling to get trac­tion with poten­tial cus­tomers, now, in ear­ly Jan­u­ary, buy­ers were bang­ing at the door. “That’s just the nature of human psy­chol­o­gy,” he said. “When­ev­er a cat­a­stro­phe arrives, peo­ple imme­di­ate­ly want insur­ance for that cat­a­stro­phe.” The virus was still con­fined to Chi­na and Kraut faced a grim cal­cu­la­tion: Should the com­pa­ny write busi­ness inter­rup­tion poli­cies that would cov­er SARS-CoV­‑2, out­side of Asia? “You clear­ly have the human tragedy,” he said. “On the oth­er hand you are in charge of the busi­ness unit.” But there were too many warn­ing signs—too much risk for Munich Re. It would have been like sell­ing fire insur­ance for a house already in flames. Kraut made the deci­sion not to sell.

In a sense, Munich Re had dodged a bul­let: Had the com­pa­ny suc­ceed­ed at sell­ing pan­dem­ic pro­tec­tion to cor­po­rate giants start­ing 19 months before, it would have col­lect­ed almost no pre­mi­ums and now be pay­ing out on every sin­gle one. Kraut acknowl­edged as much, but offered that if insur­ers nev­er pay out, “then you lose the rea­son of exis­tence.”

...

On the after­noon of April 10, as the world­wide death toll crossed 100,000, the data sci­ence and prod­uct teams gath­ered on a Zoom call to dis­cuss a new Covid-19 sce­nario tool. The goal was to help an inter­na­tion­al aid agency con­cerned about the pos­si­ble tra­jec­to­ries for devel­op­ing coun­tries. Metabio­ta’s mod­els are built for long-term under­stand­ing rather than real-time analy­sis, but as clients turned to them for infor­ma­tion, they scram­bled to adapt. With home and office life now ful­ly merged—“Was Ben going to join this one?” Mad­hav asked. “No, I think he’s on child­care,” came the response—everyone turned off their video to save band­width for the screen­share. One data sci­en­tist kicked off the call by show­ing a rough ver­sion of the new tool, pag­ing through alter­nate­ly dis­heart­en­ing and ter­ri­fy­ing graphs illus­trat­ing the best- and worst-case results for 16 coun­tries, depend­ing on how the virus was con­tained. The for­mer showed hun­dreds of thou­sands of addi­tion­al deaths from late March onward. In the lat­ter, reflect­ing a total break­down in con­tain­ment, the deaths reached into the tens of mil­lions.

...

“Nobody bought the pol­i­cy.” I could­n’t stop think­ing about what Wolfe had told me, back when I recon­nect­ed with him in March. It was­n’t quite nobody, as it turned out. Kraut told me that one com­pa­ny in the health care indus­try in the US had bought some lev­el of pan­dem­ic pro­tec­tion, although the insur­er that sold it had lat­er quit sell­ing the poli­cies due to lack of inter­est. For con­fi­den­tial­i­ty rea­sons, Kraut would­n’t say who the end client was or whether it had received pay­ment.

There are some large cor­po­rate insur­ance poli­cies that do cov­er dis­ease-relat­ed loss­es, such as event can­cel­la­tion cov­er­age; both Munich Re and Swiss Re announced that they poten­tial­ly faced hun­dreds of mil­lions of dol­lars in claims con­nect­ed to sus­pen­sion of the Olympics and oth­er events. In April, news sur­faced that the Wim­ble­don ten­nis tour­na­ment was set to col­lect $140 mil­lion from an insur­ance pol­i­cy in which it had demand­ed a pan­dem­ic pro­tec­tion clause 17 years earlier—after the SARS out­break in 2003. And even as late as Feb­ru­ary, when the virus was already world­wide news, hedge fund man­ag­er Bill Ack­man man­aged to find a tak­er on a $27 mil­lion invest­ment bet that the virus could crash the stock mar­ket. It was essen­tial­ly an insur­ance pol­i­cy for his port­fo­lio. When he cashed it in to the tune of $2.6 bil­lion in March, after going on TV and warn­ing of the poten­tial dev­as­ta­tion the virus could cause, he felt the need to take to Twit­ter and defend him­self against accu­sa­tions of prof­it­ing off human mis­ery.

...

But now, as we swing wild­ly through the pan­ic end of the pendulum—justified pan­ic, as hun­dreds of thou­sands die and the inter­na­tion­al econ­o­my collapses—there’s no longer a need to explain to air­lines or hotel chains or sports fran­chis­es how even a small amount of pan­dem­ic insur­ance might help them. Gun­ther Kraut and his group find them­selves del­uged with hun­dreds of requests for the busi­ness inter­rup­tion poli­cies on the next out­break. Now their chal­lenge is vol­ume, tak­ing a pol­i­cy meant to be cus­tomized for each client and con­vert­ing it into a com­mod­i­ty that can be sold to many of them at once.

...

With­out a doubt, insur­ance will fac­tor into think­ing about the eco­nom­ic con­se­quences of pan­demics going for­ward. Already sev­er­al promi­nent US restau­rants have sued to try to force the issuers of their cur­rent busi­ness inter­rup­tion poli­cies to cov­er coro­n­avirus loss­es. (Where poli­cies don’t specif­i­cal­ly include or exclude dis­ease, insur­ers have just denied any Covid-relat­ed claims from small busi­ness­es, leav­ing them with no relief.) Some in the insur­ance indus­try spec­u­late that banks may now make busi­ness loans in some indus­tries, like trav­el and hos­pi­tal­i­ty, con­tin­gent on hav­ing epi­dem­ic insur­ance. Or gov­ern­ments may sim­ply man­date such cov­er­age. In any case, the demand for dis­ease-based insur­ance may quick­ly out­strip even the rein­sur­ers’ and oth­er investors’ abil­i­ty to cov­er the poli­cies.

Nation­al gov­ern­ments may end up the ulti­mate pan­dem­ic rein­sur­ers, step­ping in to prop up the insur­ance mar­ket, as the US did after 9/11 with the 2002 Ter­ror­ism Risk Insur­ance Act. By late May, there were already mul­ti­ple pro­pos­als in Con­gress do just that. “I think it’s very fair to think 9/11 is to ter­ror­ism as Covid-19 is to epi­dem­ic risk,” Wolfe said.

From a cer­tain angle, it will always appear ghoul­ish for insur­ers to cap­i­tal­ize on the risk of mis­ery. Insur­ance trig­gers are them­selves inher­ent­ly cold, emo­tion­less calculations—a num­ber of sick or dead, or a lev­el of fear on a Sen­ti­ment Index. Both Metabio­ta and Munich Re have explored the pos­si­bil­i­ty that coun­tries them­selves, par­tic­u­lar­ly in the devel­op­ing world, could be insured against epi­demics and pan­demics. But one pan­dem­ic-insur­ance-like prod­uct on the mar­ket, a $425 mil­lion “pan­dem­ic bond” set up by the World Bank in con­sul­ta­tion with Munich Re and Swiss Re, has been heav­i­ly crit­i­cized for fail­ing to pay out quick­ly enough. While the bond did even­tu­al­ly deliv­er the part that cov­ered coro­n­avirus­es in April, the World Bank was accused of mak­ing the trig­gers need­less­ly com­plex and then dawdling while bod­ies were pil­ing up.

...

Even if and when pan­dem­ic insur­ance poli­cies become wide­spread, they aren’t a panacea for the kind of eco­nom­ic ruin we are cur­rent­ly liv­ing through. One only has to look to the 2008 mort­gage cri­sis to see how finan­cial alche­my can go wrong. There will be small busi­ness­es priced out of cov­er­age, insur­ers who exploit every loop­hole to avoid claims, and cor­po­rate exec­u­tives who enrich them­selves and not their work­ers when they do receive pay­ments. But if SARS-CoV­‑2 has shown any­thing, it’s that we need every pre­ven­tive weapon in the arse­nal. Even a mar­gin­al amount of pan­dem­ic insur­ance could have meant few­er lay­offs, dilut­ing the eco­nom­ic pain. “Right now, tax­pay­ers are going to soak up 100 per­cent of the risk,” Wolfe said of the coro­n­avirus impacts. As of late May, the US eco­nom­ic bailout alone amount­ed to $2 tril­lion and count­ing. Pan­dem­ic insur­ance would shift at least some of that bur­den onto investors who’d will­ing­ly tak­en on the risk. “How much risk will the pri­vate sec­tor be able to take? I’m an opti­mist on that. More than it’s cur­rent­ly tak­ing. I don’t think any­body would say it’s not at least 5 to 10 per­cent,” Wolfe said. Five per­cent of the bailout would amount to $100 bil­lion lift­ed off the books of the tax­pay­ers and onto investors who had gam­bled on the risk.

...

————

“We Can Pro­tect the Econ­o­my From Pan­demics. Why Did­n’t We?” by Evan Ratliff; Wired; 06/16/2020

“Nor was he par­tic­u­lar­ly inter­est­ed in cast­ing blame—in offer­ing an I‑told-you-so from the intre­pid virus hunter. “Plen­ty of peo­ple can speak to that,” he said. “It’s like Good Vibra­tions: I don’t want to play that any­more. I have a new record.” Now 49, Wolfe had trad­ed the Cameroon­ian jun­gle for the con­fer­ence rooms of Sil­i­con Val­ley. When I saw him on Zoom, his shoul­der-length locks were gone, and his quar­an­tine beard was shot through with gray. But he had the same glow of enthu­si­asm I remem­bered. His new pre­oc­cu­pa­tion, he told me, was pan­dem­ic insur­ance.”

Dr. Nathan Wolfe has spent decades now think­ing about pan­demics. But as the author of this arti­cle found, his old acquain­tance had a very dif­fer­ent kind of pan­dem­ic inter­est in 2020 com­pared to Wolfe’s inter­ests back in 2006 when Wolfe, then a UCLA epi­demi­ol­o­gy pro­fes­sor, was first putting togeth­er a glob­al net­work of research out­posts for the pur­pose of track­ing the “viral chat­ter” of regions in the hopes of detect­ing emerg­ing out­breaks. As we saw in Alex­is Ban­den-May­er’s arti­cle, the pre­cur­sor to Metabio­ta, the non-prof­it Glob­al Viral Fore­cast­ing Ini­tia­tive (GVFI), was already receiv­ing dona­tions from a num­ber of pri­vate sources includ­ing $30 mil­lion from Google. . Flash for­ward to 2020 and the GVFI had trans­formed into Metabio­ta, a for-prof­it epi­demi­o­log­i­cal data com­pa­ny. But the trans­for­ma­tion of Metabio­ta into an epi­demi­o­log­i­cal data com­pa­ny is just one facet of this trans­for­ma­tion. Metabio­ta isn’t just in the big data busi­ness. It’s at the heart of an whole new seg­ment of the insur­ance mar­ket­place being cre­at­ed by Ger­man rein­sur­ance giant Munich Re. A pan­dem­ic insur­ance mar­ket­place that is, by its very nature, implic­it­ly glob­al in scope. The stakes almost could­n’t be high­er. And, implic­it­ly, the poten­tial prof­its and loss­es too. The GVFI had trans­formed into the key infor­mat­ics com­po­nent of what could be the largest insur­ance mar­ket on the plan­et. Except there was catch to this remark­ably pre­scient busi­ness mod­el: the mega-pan­dem­ic hit almost right after they start­ed sell­ing this insur­ance. There was no oppor­tu­ni­ty to reap the prof­its before the big pay­out. Except there was anoth­er major catch: no one bought the insur­ance. Munich Re dodged a giant bul­let at the same time the demand for this new mar­ket sud­den blos­somed:

...
This was where insur­ance came in, specif­i­cal­ly a kind of pan­dem­ic insur­ance policy—for busi­ness­es, and per­haps even for countries—that would pay out as soon as an epi­dem­ic reached a cer­tain thresh­old. In 2015, Metabio­ta had part­nered with Ger­man rein­sur­ance giant Munich Re and Amer­i­can insur­ance bro­ker­age Marsh to devel­op and sell a pol­i­cy specif­i­cal­ly to guard large busi­ness­es against pan­demics—to stanch the finan­cial loss­es and keep them afloat. They’d launched it in mid-2018, a year and a half before the first Covid-19 cas­es appeared in Chi­na.

My sense of tedi­um evap­o­rat­ed. As Wolfe and I were talk­ing, a total eco­nom­ic lock­down was in place, with mil­lions of jobs dis­ap­pear­ing by the week and lines at food pantries stretch­ing by the hour. And here he was say­ing that they had come up with a kind of finan­cial vac­cine for exact­ly this sce­nario, released not long before the worst pan­dem­ic in a cen­tu­ry. It would­n’t stop the virus, of course, but it could help alle­vi­ate some of the mis­ery that flowed from it.

How must those CEOs feel, I won­dered aloud, who had the fore­sight to buy the world’s first pan­dem­ic busi­ness insur­ance? What a sto­ry they would have to tell.

There was just one prob­lem. “By and large we failed,” Wolfe said. “Not because we did­n’t do the mod­els well. We enabled the first busi­ness-dis­rup­tion insur­ance for pan­demics. But nobody bought it.”
...

But the poten­tial prof­its from sell­ing pan­dem­ic insur­ance is just one side of this busi­ness mod­el. In order to off­set the glob­al nature of pan­demics, Munich Re need­ed to find a way to off­set the finan­cial blunt trau­ma of hav­ing to pay out to the entire plan­et at once when a pan­dem­ic does hap­pen. This is done by sell­ing expo­sure to that risk to investors: by tak­ing on the risk, investors get paid by Munich Re when there’s not a pan­dem­ic, in exchange for agree­ing to pay Munich Re in the event of one. So Munich Re has two poten­tial­ly rev­enue streams in this busi­ness: the mon­ey it was col­lect­ing from the clients buy­ing insur­ance, and the mon­ey it could col­lect from the investors. In oth­er words, Munich Re’s busi­ness mod­el relied on the investors mak­ing poor deci­sions and/or get­ting unlucky. Investors like pen­sion funds. And it would be Metabio­ta pro­vid­ing the pan­dem­ic sever­i­ty met­rics that would be used to deter­mine whether or not a pan­dem­ic had reached the lev­els of sever­i­ty need­ed to trig­ger a pay­out:

...
Munich Re—a com­pa­ny built to absorb the risk of others—had a risk prob­lem of its own: name­ly, the pos­si­bil­i­ty of a glob­al pan­dem­ic. Insur­ance is essen­tial­ly the busi­ness of quan­ti­fy­ing risk and then smooth­ing it out. But for a world­wide out­break, the math in its life insur­ance port­fo­lio looked wor­ry­ing even to Kraut and his col­leagues, who spent their careers pon­der­ing the dark­est risks. In late 2011, Kraut’s team decid­ed to try to do some­thing about it.

...

The math applies to oth­er insur­ance “per­ils,” as they’re known—earthquakes, floods, wild­fires. And ordi­nary deaths, most of the time. But there­in lay the prob­lem for Kraut, who was part­ly respon­si­ble for mak­ing sure the com­pa­ny’s life insur­ance divi­sion did­n’t shoul­der unsus­tain­able risks. Local dis­ease out­breaks were like the hail­storms of life insur­ance: rare and dev­as­tat­ing region­al events that could be count­ed on to hap­pen at dif­fer­ent times in dif­fer­ent locales. “Now you quick­ly see the prob­lem with insur­ing pan­dem­ic risk, because a pan­dem­ic is by def­i­n­i­tion a glob­al event,” Kraut said. Imag­ine a hail­storm spread­ing from town to town, across the globe, in a cat­a­clysmic chain: “The whole con­cept of glob­al diver­si­fi­ca­tion does­n’t work out any­more.” An out­break on the scale of the 1918 flu—50 mil­lion dead worldwide—might be a one-in-500-year risk, an event way out on the tail of a prob­a­bil­i­ty curve. But a pan­dem­ic at that scale, or even one con­sid­er­ably small­er, could not only over­whelm life insur­ance com­pa­nies but Munich Re too.

To tack­le Munich Re’s expo­sure, Kraut’s team began attempt­ing to quan­ti­fy and price this incred­i­bly remote, unpre­dictable risk. If they man­aged to do that, they would then need to sell part of that risk—to find some­one will­ing to insure the rein­sur­er. “No one real­ly had tried to do a trans­ac­tion at a one-in-500-year return peri­od,” Kraut said. His boss gave it a 50–50 chance of suc­cess.

But over the course of two years, the group grad­u­al­ly built up a list of poten­tial buy­ers. It turned out that there were a few large insti­tu­tion­al investors look­ing to diver­si­fy their own port­fo­lios, and a lit­tle bit of pan­dem­ic risk was just the thing. Munich Re would pro­vide them with annu­al pay­ments, year after year. In the rare event of a pan­dem­ic, they would have to cov­er Munich Re’s loss­es. One inter­est­ed class of investor—if a macabre one—was pen­sion funds, which typ­i­cal­ly grap­ple with some­thing called longevi­ty risk: the chance that peo­ple will live longer than expect­ed. “It’s not real­ly good ter­mi­nol­o­gy to call it a ‘risk,’ ” Kraut said. “It’s a good thing, tech­ni­cal­ly! But if peo­ple live a lot longer than expect­ed, then a pen­sion fund needs to pay out a lot more pen­sions than they orig­i­nal­ly cal­cu­lat­ed.” A dead­ly pan­dem­ic that takes the lives of pen­sion­ers, to put it in the most clin­i­cal terms, means few­er years of pen­sion pay­outs, can­cel­ing some of the longevi­ty risk. Should no pan­dem­ic arise, they would pock­et pay­ments from Munich Re. By 2013, Kraut and his team had put togeth­er enough investors—starting with a large Aus­tralian pen­sion fund—to take some of the pan­dem­ic prob­lem off of Munich Re’s books. But he soon encoun­tered an unex­pect­ed hitch: The mech­a­nisms writ­ten to trig­ger the deal relied on a series of “pan­dem­ic phas­es” mon­i­tored by the World Health Orga­ni­za­tion. (Phase 1: Virus is cir­cu­lat­ing in ani­mals. Phase 2: Reports of human infec­tion. Phase 3: Human-to-human trans­mis­sion. And so on up to Phase 6: Sus­tained out­breaks in mul­ti­ple regions.) Some­time in 2013, how­ev­er, the WHO aban­doned this sys­tem for a less spe­cif­ic four phas­es. Kraut sud­den­ly need­ed some oth­er orga­ni­za­tion to delin­eate the stages of epi­demics reli­ably enough to write into an insur­ance pol­i­cy. And he need­ed some­one to mon­i­tor epi­demics close­ly, to know when they hit agreed upon triggers—illnesses, deaths, spread. “But you can’t just hire the WHO,” he said.
...

And note how Metabio­ta’s pre­dic­tion ser­vices did­n’t just involve the risk of pan­demics. They also gen­er­at­ed a “Sen­ti­ment Index” that appears to be based an attempt to pre­dict how ter­ri­fy­ing the poten­tial pan­dem­ic might be, with asso­ci­at­ed eco­nom­ic con­se­quences. In 2015, Metabio­ta raised $30 mil­lion from investors in part based on the promise of this ‘fear index’ in the upcom­ing pan­dem­ic insur­ance:

...
As sophis­ti­cat­ed as Metabio­ta’s sys­tem was, how­ev­er, it would need to be even more refined to incor­po­rate into an insur­ance pol­i­cy. The mod­el would need to cap­ture some­thing much more dif­fi­cult to quan­ti­fy than his­tor­i­cal deaths and med­ical stock­piles: fear. The eco­nom­ic con­se­quences of a scourge, the his­tor­i­cal data showed, were as much a result of soci­ety’s response as they were to the virus itself.

The group start­ed build­ing what became known as the Sen­ti­ment Index. Ben Oppen­heim, head of the prod­uct team and a polit­i­cal sci­en­tist, had stud­ied the work of Paul Slovic, a Uni­ver­si­ty of Ore­gon psy­chol­o­gy pro­fes­sor who stud­ied how human beings per­ceive and respond to risk. Inspired by Slovic’s data-dri­ven approach, they gath­ered their own infor­ma­tion from around the world on how much var­i­ous symp­toms fright­ened peo­ple. To val­i­date their mea­sures, they also began track­ing and study­ing how media cov­er­age evolved around dif­fer­ent types of out­breaks. Scari­er dis­eases tend­ed to gen­er­ate more news sto­ries.

...

The Sen­ti­ment Index was built to be, as Oppen­heim put it, “a cat­a­log of dread.” For any giv­en pathogen, it could spit out a score from 0 to 100 accord­ing to how fright­en­ing the pub­lic would find it. That num­ber could then be used to help cal­cu­late the pos­si­ble finan­cial loss­es from an epi­dem­ic, every­thing from emp­ty hotels to post­poned min­ing projects. Mad­hav and her team, along with Wolfe and Oppen­heim, also researched the broad­er eco­nom­ic con­se­quences of dis­ease out­breaks, mea­sured in the “cost per death pre­vent­ed” incurred by soci­etal inter­ven­tions. “Mea­sures that decreased per­son-to-per­son con­tact, includ­ing social dis­tanc­ing, quar­an­tine, and school clo­sures, had the great­est cost per death pre­vent­ed, most like­ly because of the amount of eco­nom­ic dis­rup­tion caused by those mea­sures,” they wrote in a 2018 paper.

By then, the Sen­ti­ment Index had been test­ed against Metabio­ta’s data­base of his­tor­i­cal pan­demics, and Munich Re began incor­po­rat­ing it into a busi­ness inter­rup­tion pol­i­cy. Gun­ther Kraut’s group was then oper­at­ing as a stand-alone unit called Epi­dem­ic Risk Solu­tions, with groups in Sin­ga­pore, Munich, and Lon­don. The promise, for both com­pa­nies, was enor­mous. Metabio­ta had raised $30 mil­lion via ven­ture fund­ing in 2015, part­ly on the idea that pro­vid­ing the tech­nol­o­gy behind pan­dem­ic cov­er­age could be a growth busi­ness. There was, after all, only so much a gov­ern­ment agency might pay Metabio­ta for dis­ease sur­veil­lance; the uni­verse of large busi­ness­es that could suf­fer loss­es from a major pan­dem­ic, how­ev­er, was near­ly lim­it­less. Munich Re had a chance to cre­ate an entire­ly new seg­ment of the insur­ance mar­ket, for a risk that exist­ed in lit­er­al­ly every part of the globe.

...

It sounds like this part­ner­ship between Metabio­ta and Munich Re start­ed in 2013, at which point Metabio­ta was already a recip­i­ent of tens of mil­lions of dol­lars in funds from US gov­ern­ment agen­cies like USAID and the DOD. It’s part of what makes Munich Re’s out­reach to Metabio­ta so notable: pri­or Munich Re’s inter­est, Metabioa­ta was heav­i­ly a crea­ture of Sil­i­con Val­ley and Wash­ing­ton DC. And remained so even after the Munich Re part­ner­ship began:

...
As it hap­pened, Wolfe was already think­ing about the busi­ness shocks of pan­demics when Kraut’s email arrived in Metabio­ta’s inbox in 2013. By this time, Wolfe’s pub­lic pro­file as an Indi­ana Jones-like virus hunter had been well estab­lished. He’d been fea­tured on CNN and had giv­en the oblig­a­tory TED talks. He’d walked away from his tenured posi­tion at UCLA, moved to San Fran­cis­co, and found­ed Metabio­ta. Wolfe lever­aged his aca­d­e­m­ic work into the pri­vate sec­tor, using the data from his net­work of research sta­tions to con­duct dis­ease sur­veil­lance for clients. For years, the com­pa­ny sub­sist­ed large­ly on gov­ern­ment con­tracts, includ­ing more than $20 mil­lion from the Depart­ment of Defense and aid agen­cies involved in man­ag­ing epi­dem­ic out­breaks. Metabio­ta also part­nered with the for­eign assis­tance agency USAID on a project called Pre­dict, help­ing to build a data­base cat­a­loging virus­es in their ani­mal reser­voirs and fore­cast­ing which ones might jump to humans. “There was some suc­cess,” Wolfe told me. “Some mon­ey was put into pre­dic­tion and pre­ven­tion. Not enough, obvi­ous­ly.”

...

Then Gun­ther Kraut’s email arrived. Kraut and Wolfe met up at a con­fer­ence in Munich and began riff­ing. Soon Metabio­ta was pro­vid­ing dis­ease mon­i­tor­ing for Munich Re’s life insur­ance divi­sion.

Kraut, how­ev­er, had an even more ambi­tious idea in mind. What if, instead of sim­ply hedg­ing its own life insur­ance busi­ness in the case of a pan­dem­ic, Munich Re could use the same con­cept to insure oth­er busi­ness­es against them? Busi­ness inter­rup­tion insur­ance, the poli­cies that pro­tect com­pa­nies against income loss­es from dis­as­ters like fires or hur­ri­canes, often explic­it­ly exclud­ed dis­ease. (And when it did­n’t, insur­ers could still use the ambi­gu­i­ty to deny claims.) The risk was thought to be too large, too unpre­dictable to quan­ti­fy. But Munich Re had already proven it could cov­er its own life insur­ance risk in pan­demics, and now it had a part­ner in Metabio­ta that spe­cial­ized in seem­ing­ly unpre­dictable out­breaks. What if they could cre­ate and sell a busi­ness inter­rup­tion insur­ance pol­i­cy that cov­ered epi­demics, start­ing with acute­ly vul­ner­a­ble indus­tries like trav­el and hos­pi­tal­i­ty? They could then pass on the pay­out risk from those poli­cies to the same types of investors who had bought their life risk. “There is a bit of finan­cial alche­my to the whole thing,” Wolfe told me lat­er. “You real­ly are cre­at­ing some­thing from noth­ing.”
...

Now, get­ting to Metabio­ta’s role in the pan­dem­ic response, note how the com­pa­ny had appar­ent­ly run a large set of sce­nar­ios fore­cast­ing the con­se­quences of a nov­el coro­n­avirus spread­ing around the globe two years pri­or. It rais­es the fas­ci­nat­ing ques­tion: Giv­en Dr. Wolfe and Metabio­ta’s close col­lab­o­ra­tive rela­tion­ship with the Eco­Health alliance and the glob­al net­work of researchers who were engaged in gain-of-func­tion coro­n­avirus research, did Metabio­ta incor­po­rate into its nov­el coro­n­avirus mod­els the pos­si­bil­i­ty of a lab leak as a result of all this research it was involved with?

...
On Decem­ber 31, 2019, Nita Mad­hav was in Port­land, Ore­gon, attend­ing a cous­in’s wed­ding. That sum­mer, after four years lead­ing the infec­tious dis­ease data sci­ence team, she’d tak­en over as CEO of Metabio­ta. Now she was enjoy­ing a hol­i­day away from the stress of run­ning a 60-plus-employ­ee com­pa­ny. Her extend­ed fam­i­ly had trav­eled from around the US and beyond to cel­e­brate the wed­ding and count down the last moments of 2019 togeth­er. But that morn­ing, before the cer­e­mo­ny, Mad­hav began get­ting texts from Oppen­heim telling her about a clus­ter of unusu­al pneu­mo­nia-­like infec­tions in Wuhan, Chi­na. The com­pa­ny’s ear­ly detec­tion sys­tem, which includ­ed an algo­rithm for pars­ing and high­light­ing news sto­ries about out­breaks, was flag­ging Wuhan as a poten­tial hot spot. The team typ­i­cal­ly looked at hun­dreds of media reports a week and approached new ones cau­tious­ly. At the recep­tion, Mad­hav mes­saged with Oppen­heim and won­dered: If it was res­pi­ra­to­ry, could the source be more like H7N9, the avian flu? A coro­n­avirus like SARS-CoV?

The next day, she checked in with her staff, who would need to quick­ly mar­shal enough data to project where the out­break could land. “We were just try­ing to see what we could find out,” she said. “We weren’t yet in the all-hands-on-deck mode. By the third week in Jan­u­ary, we cer­tain­ly were.”

As the human and eco­nom­ic dev­as­ta­tion mul­ti­plied in tan­dem across the globe, Metabio­ta’s employ­ees sud­den­ly found them­selves liv­ing inside their own mod­el’s pro­jec­tions. Just two years ear­li­er, the com­pa­ny had run a large set of sce­nar­ios fore­cast­ing the con­se­quences of a nov­el coro­n­avirus spread­ing around the globe. “I guess part of what I’m strug­gling with emo­tion­al­ly is that it’s almost like we’ve been attacked by a cliché,” Oppen­heim told me lat­er. “No one can pre­dict the exact tim­ing and loca­tion and dynam­ics, but the broad con­tours are a sto­ry that peo­ple have walked through specif­i­cal­ly before.”
...

And as we can see, the way things played out — with a pan­dem­ic hit­ting right after they launch this insur­ance prod­uct but with­out any­one buy­ing it — Munich Re did­n’t just dodge a bul­let. Munich Re and Metabio­ta expe­ri­enced the great­est mar­ket­ing cam­paign they could have pos­si­bly asked for:

...
At the same time Metabio­ta was watch­ing the night­mare that its mod­els had antic­i­pat­ed unfold, Gun­ther Kraut was in Sin­ga­pore fac­ing a dif­fer­ent prob­lem. Where Munich Re’s epi­dem­ic solu­tions divi­sion had been strug­gling to get trac­tion with poten­tial cus­tomers, now, in ear­ly Jan­u­ary, buy­ers were bang­ing at the door. “That’s just the nature of human psy­chol­o­gy,” he said. “When­ev­er a cat­a­stro­phe arrives, peo­ple imme­di­ate­ly want insur­ance for that cat­a­stro­phe.” The virus was still con­fined to Chi­na and Kraut faced a grim cal­cu­la­tion: Should the com­pa­ny write busi­ness inter­rup­tion poli­cies that would cov­er SARS-CoV­‑2, out­side of Asia? “You clear­ly have the human tragedy,” he said. “On the oth­er hand you are in charge of the busi­ness unit.” But there were too many warn­ing signs—too much risk for Munich Re. It would have been like sell­ing fire insur­ance for a house already in flames. Kraut made the deci­sion not to sell.

In a sense, Munich Re had dodged a bul­let: Had the com­pa­ny suc­ceed­ed at sell­ing pan­dem­ic pro­tec­tion to cor­po­rate giants start­ing 19 months before, it would have col­lect­ed almost no pre­mi­ums and now be pay­ing out on every sin­gle one. Kraut acknowl­edged as much, but offered that if insur­ers nev­er pay out, “then you lose the rea­son of exis­tence.”
...

We have to ask: So what was the price Munich Re was charg­ing when it first offered these prod­ucts and found effec­tive­ly no buy­ers? Was it a real­ly just that busi­ness­es were hes­i­tant to add a new expense to pro­tect against a ‘once in 100 year’ event? Or were these poli­cies also seen as a rip off? A rip off that will seem much much less like a rip off post-COVID. And if it was a rip off, we have to ask why do so when they’re just try­ing to get it off the ground when mass adop­tion is key? Was Metabio­ta warn­ing Munich Re that a pan­dem­ic was just around the cor­ner?

Final­ly, note the giant prize await­ing the pan­dem­ic insur­ance indus­try after they get this sec­tor of the econ­o­my set up: if the cost of pay­ing up on these pan­dem­ic poli­cies exceeds what Munich Re and the oth­er insur­ers can fea­si­bly absorb, gov­ern­ments might step in and bail the indus­try out. Beyond that, Munich Re and Metabio­ta were even involved in the cre­ation of pan­dem­ic insur­ance for entire devel­op­ing coun­tries in con­junc­tion with the World Bank. Insur­ance that proved extreme­ly so and dif­fi­cult to cash in on in seems:

...
But now, as we swing wild­ly through the pan­ic end of the pendulum—justified pan­ic, as hun­dreds of thou­sands die and the inter­na­tion­al econ­o­my collapses—there’s no longer a need to explain to air­lines or hotel chains or sports fran­chis­es how even a small amount of pan­dem­ic insur­ance might help them. Gun­ther Kraut and his group find them­selves del­uged with hun­dreds of requests for the busi­ness inter­rup­tion poli­cies on the next out­break. Now their chal­lenge is vol­ume, tak­ing a pol­i­cy meant to be cus­tomized for each client and con­vert­ing it into a com­mod­i­ty that can be sold to many of them at once.

...

With­out a doubt, insur­ance will fac­tor into think­ing about the eco­nom­ic con­se­quences of pan­demics going for­ward. Already sev­er­al promi­nent US restau­rants have sued to try to force the issuers of their cur­rent busi­ness inter­rup­tion poli­cies to cov­er coro­n­avirus loss­es. (Where poli­cies don’t specif­i­cal­ly include or exclude dis­ease, insur­ers have just denied any Covid-relat­ed claims from small busi­ness­es, leav­ing them with no relief.) Some in the insur­ance indus­try spec­u­late that banks may now make busi­ness loans in some indus­tries, like trav­el and hos­pi­tal­i­ty, con­tin­gent on hav­ing epi­dem­ic insur­ance. Or gov­ern­ments may sim­ply man­date such cov­er­age. In any case, the demand for dis­ease-based insur­ance may quick­ly out­strip even the rein­sur­ers’ and oth­er investors’ abil­i­ty to cov­er the poli­cies.

Nation­al gov­ern­ments may end up the ulti­mate pan­dem­ic rein­sur­ers, step­ping in to prop up the insur­ance mar­ket, as the US did after 9/11 with the 2002 Ter­ror­ism Risk Insur­ance Act. By late May, there were already mul­ti­ple pro­pos­als in Con­gress do just that. “I think it’s very fair to think 9/11 is to ter­ror­ism as Covid-19 is to epi­dem­ic risk,” Wolfe said.

From a cer­tain angle, it will always appear ghoul­ish for insur­ers to cap­i­tal­ize on the risk of mis­ery. Insur­ance trig­gers are them­selves inher­ent­ly cold, emo­tion­less calculations—a num­ber of sick or dead, or a lev­el of fear on a Sen­ti­ment Index. Both Metabio­ta and Munich Re have explored the pos­si­bil­i­ty that coun­tries them­selves, par­tic­u­lar­ly in the devel­op­ing world, could be insured against epi­demics and pan­demics. But one pan­dem­ic-insur­ance-like prod­uct on the mar­ket, a $425 mil­lion “pan­dem­ic bond” set up by the World Bank in con­sul­ta­tion with Munich Re and Swiss Re, has been heav­i­ly crit­i­cized for fail­ing to pay out quick­ly enough. While the bond did even­tu­al­ly deliv­er the part that cov­ered coro­n­avirus­es in April, the World Bank was accused of mak­ing the trig­gers need­less­ly com­plex and then dawdling while bod­ies were pil­ing up.
...

Is nation-state pan­dem­ic insur­ance the inevitable end point of this sec­tor of the insur­ance indus­try? It’s clear­ly what Munich Re and Metabio­ta have in mind. The growth poten­tial for this sec­tor is obvi­ous­ly mas­sive. It was­n’t obvi­ous before. But it’s obvi­ous now. So we’ll see what sort of growth this new pan­dem­ic insur­ance sec­tor of the mar­ket­place expe­ri­ences now that the world is still in the mid­dle of the great­est adver­tise­ment for pan­dem­ic insur­ance in his­to­ry.

Here’s a pair of arti­cles that raise a dis­turb­ing ques­tion in rela­tion to the whole sto­ry of Dr. Nathan Wolfe and his work on Metabio­ta and the pub­lic-pri­vate part­ner­ship — involv­ing enti­ties like Google and USAID — financ­ing that effort: So was Jef­frey Epstein at all involved with these virus-relat­ed projects?

It’s a ques­tion raised by the sim­ple obser­va­tion that Dr. Nathan Wolfe — whose work has long relied, in part, on pri­vate dona­tions — appears to have been oper­at­ing with­in the very same net­work that Jef­frey Epstein oper­at­ed in as a kind of high-tech sug­ar-dad­dy for promi­nent sci­en­tists. As we’ve seen, Epstein’s ties to the sci­en­tif­ic com­mu­ni­ty was large­ly through his rela­tion­ship to lit­er­ary agent John Brock­man. Brock­man’s Edge Foun­da­tion act­ed as a kind of match-mak­er that would pair sci­en­tists and authors with poten­tial bene­fac­tors. For exam­ple, recall how, in 2004, Brock­man host­ed a din­ner were Epstein was intro­duced to var­i­ous sci­en­tists. Also at the din­ner were Jeff Bezos, Sergey Brin, and Lar­ry Page. The Edge Foun­da­tion, and num­ber of high­ly notable per­son­al­i­ties asso­ci­at­ed with it, is part of what made the Epstein sto­ry such an embar­rass­ment for the sci­en­tif­ic estab­lish­ment. It real­ly was a kind of ‘Who’s Who’ meet up for promi­nent sci­en­tists and billionaires...and Jef­frey Epstein.

So when we observe that Dr. Wolfe is a mem­ber of the Edge Foun­da­tion, and we know he was keen­ly inter­est­ed in rais­ing pri­vate funds for his virus-relat­ed efforts, we have have to ask: was Epstein at all involved with Metabio­ta or its pre­cur­sors? How about the pan­dem­ic insur­ance com­po­nent that Metabio­ta got involved with in 2013? Epstein was a finance guy, so it’s not hard to imag­ine he would have be incred­i­bly inter­est­ed in such a grand project. Was Epstein at all involved?

We have no idea, but as the fol­low­ing pair of arti­cles lay out, there’s anoth­er fas­ci­nat­ing con­nec­tion between Epstein and Wolfe from 2012 that is hard to ignore: Epstein’s part­ner in crime, Ghis­laine Maxwell, cre­at­ed a char­i­ty in 2012 called Ter­ra­Mar, osten­si­bly ded­i­cat­ed to rais­es pub­lic aware­ness about the plight of the world’s oceans. It was basi­cal­ly just a web­site. When the group was shut­down in 2019 fol­low­ing Epstein’s arrest, observers not­ed how the whole thing appeared to be an effort in “rep­u­ta­tion man­age­ment” for Maxwell fol­low­ing the ini­tial scan­dal of Epstein’s arrest and inves­ti­ga­tion for sex-traf­fick­ing.

So Ter­ra­Mar was basi­cal­ly just an Epstein-relat­ed pub­lic rela­tions stunt. Here’s where Dr. Wolfe comes in: it turns out Wolfe was one of the four marine experts invit­ed to attend the Sep­tem­ber 26, 2012 Ter­ra­Mar launch cer­e­mo­ny held at the Blue Ocean Film Fes­ti­val & Con­ser­va­tion Con­fer­ence in Mon­terey, Cal­i­for­nia. So that would, at a min­i­mum, sug­gest some sort of work­ing rela­tion­ship between Wolfe and Maxwell. It’s also worth not­ing that Wolfe and Maxwell were pho­tographed togeth­er on April 24, 2012, at the TIME Mag­a­zine 100 Most Influ­en­tial Peo­ple in the World Event, so they clear­ly already knew each oth­er before Ter­ra­Mar launch lat­er that year. Because of course they knew each oth­er already. They sure­ly must of pre­vi­ous­ly con­nect­ed through the Edge Foun­da­tion.

There’s anoth­er inter­est­ing detail regard­ing that Sep­tem­ber 26, 2012, Ter­ra­Mar launch at the Blue Ocean Film Fes­ti­val & Con­ser­va­tion Con­fer­ence: One of the main fea­tures of the Ter­ra­Mar web­site is a vir­tu­al tour of the ocean ploor that you could take using the Google Ocean tool. Google Ocean is like Google Streetview, but for the ocean floor. As we’re going to see, Google Ocean was also launched at that same fes­ti­val. In oth­er words, Google gave Ter­ra­Mar ear­ly access to its new Google Ocean tool. It’s the kind of detail that sug­gest Google was more than hap­py to main­tain a work­ing rela­tion­ship with Epstein even after the ini­tial round of sex-traf­fick­ing inves­ti­ga­tions.

So what we have are details sug­gest­ing some kind of work­ing rela­tion­ship between Dr. Wolfe, Jef­frey Epstein, and Google. And as we’ve seen, Google was already fund­ing Dr Wolfe’s Metabio­ta work at this point. How about Epstein? Did any Epstein mon­ey make its way into world of virol­o­gy?

Ok, first, here’s an August 2019 arti­cle about the dis­so­lu­tion of Ter­ra­Mar and the obser­va­tions that it appears to have been noth­ing more than a rep­u­ta­tion laun­der­ing enter­prise. And, per­haps, a mon­ey-laun­der­ing enter­prise:

The New York Times

What­ev­er Hap­pened to Ghis­laine Maxwell’s Plan to Save the Oceans?

The phil­an­thropic works of Jef­frey Epstein’s ex-girl­friend nev­er mate­ri­al­ized. Now, she’s being sued by one of his vic­tims.

By Jacob Bern­stein
Aug. 14, 2019

In 2014, Ghis­laine Maxwell spoke at a Coun­cil on For­eign Rela­tions event in Wash­ing­ton, D.C. She was there in her capac­i­ty as the founder of the Ter­ra­Mar Project, an ocean­ic con­ser­va­tion group she start­ed in 2012, accord­ing to a C.F.R. spokes­woman.

The C.F.R. is one of the world’s most pres­ti­gious non­prof­it think tanks. Among its offi­cers and direc­tors then were David Rock­e­feller, one of the mod­ern era’s most revered phil­an­thropists; Col­in Pow­ell; and Robert Rubin, the sec­re­tary of the Trea­sury under Bill Clin­ton.

The Ter­ra­Mar Project was an orga­ni­za­tion with an opaque web­site and a founder who hap­pened to be the ex-girl­friend of Jef­frey Epstein, the mys­te­ri­ous mon­ey man­ag­er who — in addi­tion to being one of the C.F.R.’s Chairman’s Cir­cle” donors for at least six years — had plead­ed guilty in 2008 to state charges of solic­it­ing pros­ti­tu­tion from a minor.

Mr. Epstein spent the next year in coun­ty jail, becom­ing a sym­bol of the super­rich get­ting away with crimes that seemed like­ly to send ordi­nary peo­ple to prison for far longer.

Ms. Maxwell her­self would be a par­ty to con­fi­den­tial set­tle­ments with at least two oth­er peo­ple who said that they were vic­tims of Mr. Epstein and that Ms. Maxwell was respon­si­ble for recruit­ing them.

She has nev­er been charged with any crime, and con­tin­ues to deny wrong­do­ing. (Attempts to reach her were not suc­cess­ful.) Even before these law­suits and the C.F.R. talk, her involve­ment in Mr. Epstein’s oper­a­tion was cit­ed fre­quent­ly in the press.

“We were unaware of the alle­ga­tions against Ms. Maxwell at the time of the event,” the C.F.R. spokes­woman wrote in an email. The spokes­woman added that Mr. Epstein’s mem­ber­ship was revoked in 2009, because he did not pay his mem­ber­ship dues while in jail.

...

Phil­an­thropy as Rep­u­ta­tion Man­age­ment

Accord­ing to tax fil­ings from 2013 to 2017, the orga­ni­za­tion gave out no mon­ey in grants. A rep­re­sen­ta­tive for the Ter­ra­Mar Project said in a state­ment that the work of the orga­ni­za­tion includ­ed help­ing orga­nize the March for the Ocean in Wash­ing­ton, a cam­paign to reduce the num­ber of lit­tered cig­a­rette butts and pub­li­ca­tion of The Dai­ly Catch, an ocean­ic con­ser­va­tion newslet­ter. The Ter­ra­Mar Project also obtained a part­ner­ship with the lux­u­ry bed­ding com­pa­ny Yves Delorme on a col­lec­tion of “water-inspired” sheets, pil­low­cas­es and com­forters.

Euan Rel­lie, a British invest­ment banker and soci­ety fix­ture who encoun­tered Ms. Maxwell at events over decades, thought the char­i­ty as she explained it to him sound­ed at least in part to be a form of “rep­u­ta­tion man­age­ment.”

Christo­pher Mason, a reporter and a long­time friend of Ms. Maxwell’s, said he won­dered if her pri­ma­ry moti­va­tion for start­ing the foun­da­tion was ocean­ic con­ser­va­tion or the con­ser­va­tion of Ghis­laine Maxwell — cre­at­ing a “respectable call­ing card” for some­one “whose rep­u­ta­tion was in jeop­ardy.”

And it was in jeop­ardy. The day before Mr. Epstein’s death, a trove of doc­u­ments were released in con­nec­tion with a defama­tion suit that Vir­ginia Giuf­fre filed against Ms. Maxwell. Ms. Giuf­fre said that, at age 16, she was recruit­ed by Ms. Maxwell and forced into being a “sex slave.” Ms. Maxwell called Ms. Giuf­fre a liar, was sued and set­tled.

In a depo­si­tion, a for­mer main­te­nance work­er at Mr. Epstein’s home described Ms. Maxwell scout­ing scores of mas­sage spas and par­lors in Flori­da, from Palm Beach to Jupiter, for Mr. Epstein. A col­lege stu­dent said she was scout­ed by Ms. Maxwell, and that she was pun­ished by Ms. Maxwell when she failed to sex­u­al­ly sat­is­fy Mr. Epstein. Now, Jen­nifer Araoz has filed suit against Ms. Maxwell and oth­ers, say­ing that she was recruit­ed as a fresh­man in high school and raped by Mr. Epstein.

A Lack of His­to­ry of Activism

Ms. Maxwell had neg­li­gi­ble expe­ri­ence as an envi­ron­men­tal activist. Her pre­ferred method of ocean­go­ing was aboard a lux­u­ry yacht, which, accord­ing to Mr. Mason, was for her the pre-emi­nent sym­bol of “sta­tus and free­dom.” It was through boat­ing that she drew her inspi­ra­tion for the foun­da­tion.

She spent much of her time in the late 1980s on the Lady Ghis­laine, a near­ly 200-foot boat owned by her father, the media mogul Robert Maxwell. It had a Jacuzzi, a sauna, a gym and pri­vate dis­co. Deep in debt, he bilked the pen­sions of thou­sands of his employ­ees, and his body was dis­cov­ered in the ocean off the Canary Islands, where he had tak­en the Lady Ghis­laine in 1991.

The death was ruled an acci­dent. The fam­i­ly report­ed­ly lost almost every­thing, includ­ing the boat.

Ms. Maxwell, then liv­ing in New York, became known for her roman­tic rela­tion­ship with Mr. Epstein, who was an all-pur­pose advis­er for the bil­lion­aire Leslie Wexn­er. (Mr. Wexn­er said in a let­ter to the Wexn­er Foun­da­tion that, in 2007, he dis­cov­ered mis­ap­pro­pri­a­tion of his funds by Mr. Epstein.)

One of Mr. Epstein’s duties was han­dling con­tracts for the Lim­it­less, a mam­moth yacht bought by Mr. Wexn­er and designed by Ban­nen­berg & Row­ell. Ms. Maxwell was eager to get aboard when it was fin­ished but nev­er did, accord­ing to Craig Tafoya, its for­mer cap­tain.

“Ghis­laine would always call me and say, ‘I’m com­ing down to use the boat with some friends. I would always tell her, ‘I have to call the own­er. I can’t just let you on the boat.’ And she would nev­er show up,” said Mr. Tafoya, who took this to mean that she nev­er got per­mis­sion. “She did that half a dozen times. And in talk­ing to a guy who worked for Ban­nen­berg, he said, ‘she does that all the time. She does it when she’s in front of all her girl­friends and wants to brag that she can go use someone’s yacht.’”

Her Plan B

Ted Waitt is the tech bil­lion­aire co-founder of Gate­way, Inc. who became Ms. Maxwell’s boyfriend after she broke up with Mr. Epstein.

Plan B, the yacht Ms. Maxwell helped him obtain and ren­o­vate, brought her to Croa­t­ia and the South of France. His check writ­ing helped secure her place at con­fer­ences as they replaced ben­e­fit galas as the first-tier social gath­er­ings of the late aughts. That was essen­tial to get­ting the Ter­ra­Mar Project off the ground.

When he met Ms. Maxwell, Mr. Waitt had a stringy, gray­ing pony­tail and wore drab suits. After she became his girl­friend, Mr. Waitt shaved his head, start­ed wear­ing tint­ed glass­es and became a vir­tu­al dop­pel­gänger for Jason Statham.

There was even a sub­ma­rine put aboard Plan B that Ms. Maxwell knew how to pilot. She began deep-sea div­ing, which she said is how she had dis­cov­ered human-made debris all over the ocean floor.

Four peo­ple remem­ber Ms. Maxwell talk­ing of jour­ney­ing to the cen­ter of the Pacif­ic Ocean, in an attempt to find, she said, Amelia Earhart’s plane and body.

The con­vic­tion of Mr. Epstein and the sub­se­quent bad press for Ms. Maxwell wore on Mr. Waitt, friends said. In 2010, they broke up. But Mr. Waitt had donat­ed at least $10 mil­lion to the William J. Clin­ton Foun­da­tion. That helped Ms. Maxwell keep some access to the world of the Clin­tons. She used con­nec­tions forged at their sum­mits to help with the 2012 start of the Ter­ra­Mar Project.

At Sea

“All the oceans are inter­con­nect­ed and relat­ed. It’s all one sea,” Ms. Maxwell said to a reporter for the Moth­er Nature Net­work in a 2012 inter­view. “It’s the one major area of the world where we can be one species with one home and one com­mon des­tiny.”

The Ter­ra­Mar web­site trum­pet­ed the sup­port of well-con­nect­ed “found­ing cit­i­zens” like Richard Bran­son and Mar­tine Assouline, a founder of the lux­u­ry cof­fee table books pub­lish­er that bears her name.

In 2013, Ms. Maxwell went to Reyk­javik and par­tic­i­pat­ed in a con­fer­ence for the Arc­tic Cir­cle. Scott Borg­er­son, a for­mer Coast Guard offi­cer and a one­time Coun­cil on For­eign Rela­tions fel­low, also attend­ed. He also appeared with her at the 2014 talk for the C.F.R, and accord­ing to numer­ous friends of Ms. Maxwell, became her boyfriend. (Three of those friends said she lat­er described him to them as a “Navy SEAL.” Mr. Borg­er­son declined to com­ment.)

Around that time, the Clin­ton Glob­al Ini­tia­tive announced a “com­mit­ment to action” from the Ter­ra­Mar Project. Lit­tle evi­dence exists that it amount­ed to much.

The tax returns of the Ter­ra­Mar Project show that between 2013 and 2017 the orga­ni­za­tion received $196,000 in pub­lic sup­port and paid out, in var­i­ous expens­es, more than $600,000, requir­ing loans from its pres­i­dent, Ms. Maxwell, total­ing $549,093.

The fil­ings do not pro­vide names of the firms or indi­vid­u­als to whom those pay­ments were made; no pro­grams were start­ed for work in the field. No grants were giv­en.

“Over all these returns, not a sin­gle dol­lar,” said Mike Crab­tree, a tax part­ner at Boulay, a C.P.A. firm in Min­neapo­lis. “The returns don’t real­ly show what’s going on, where the mon­ey is going and what it’s being used for.”

In 2014, TerraMar’s account­ing and legal fees were more than $50,000, an unusu­al­ly high num­ber giv­en the size and activ­i­ty of the orga­ni­za­tion, accord­ing to Mr. Crab­tree. “I don’t know if ‘sus­pi­cious’ is the word I’d use, but to gen­er­ate those kinds of fees a lot more would have to be going on than this would reflect,” he said.

As Mr. Epstein at last was charged in July with con­duct­ing a sex traf­fick­ing oper­a­tion that inves­ti­ga­tors say result­ed in the sex­u­al assault of dozens of minors, the Ter­ra­Mar Project shut down. It left a farewell mes­sage on its web­site, say­ing it had sought to “con­nect ocean lovers to pos­i­tive actions, high­light sci­ence, and bring con­scious change to how to peo­ple from across the globe can live, work and enjoy the ocean.”

———–

“What­ev­er Hap­pened to Ghis­laine Maxwell’s Plan to Save the Oceans?” By Jacob Bern­stein; The New York Times; 08/14/2019

““We were unaware of the alle­ga­tions against Ms. Maxwell at the time of the event,” the C.F.R. spokes­woman wrote in an email. The spokes­woman added that Mr. Epstein’s mem­ber­ship was revoked in 2009, because he did not pay his mem­ber­ship dues while in jail.”

‘We did­n’t know about all that icky con­tro­ver­sy!’ That was the utter­ly implau­si­ble expla­na­tion pro­vid­ed by the CFR fol­low­ing the reports on Ghis­laine Maxwell’s 2014 appear­ance before the group. An appear­ance that was osten­si­bly to cel­e­brate the good works of Maxwell’s Ter­rMar orga­ni­za­tion. It’s a per­fect exam­ple of how Ter­rMar was used as a kind of rep­u­ta­tion laun­der­ing oper­a­tion. By cre­at­ing this orga­ni­za­tion, groups like CFR could con­ve­nient­ly for­get about all the sex traf­fick­ing alle­ga­tions that had long been chas­ing Maxwell. A $10 mil­lion dona­tion to the Clin­ton Foun­da­tion by Maxwell’s then-boyfriend Ted Waitt did­n’t hurt with the rep­u­ta­tion laun­der­ing:

...
Euan Rel­lie, a British invest­ment banker and soci­ety fix­ture who encoun­tered Ms. Maxwell at events over decades, thought the char­i­ty as she explained it to him sound­ed at least in part to be a form of “rep­u­ta­tion man­age­ment.”

Christo­pher Mason, a reporter and a long­time friend of Ms. Maxwell’s, said he won­dered if her pri­ma­ry moti­va­tion for start­ing the foun­da­tion was ocean­ic con­ser­va­tion or the con­ser­va­tion of Ghis­laine Maxwell — cre­at­ing a “respectable call­ing card” for some­one “whose rep­u­ta­tion was in jeop­ardy.”
...

Ted Waitt is the tech bil­lion­aire co-founder of Gate­way, Inc. who became Ms. Maxwell’s boyfriend after she broke up with Mr. Epstein.

Plan B, the yacht Ms. Maxwell helped him obtain and ren­o­vate, brought her to Croa­t­ia and the South of France. His check writ­ing helped secure her place at con­fer­ences as they replaced ben­e­fit galas as the first-tier social gath­er­ings of the late aughts. That was essen­tial to get­ting the Ter­ra­Mar Project off the ground.

...

There was even a sub­ma­rine put aboard Plan B that Ms. Maxwell knew how to pilot. She began deep-sea div­ing, which she said is how she had dis­cov­ered human-made debris all over the ocean floor.

...

The con­vic­tion of Mr. Epstein and the sub­se­quent bad press for Ms. Maxwell wore on Mr. Waitt, friends said. In 2010, they broke up. But Mr. Waitt had donat­ed at least $10 mil­lion to the William J. Clin­ton Foun­da­tion. That helped Ms. Maxwell keep some access to the world of the Clin­tons. She used con­nec­tions forged at their sum­mits to help with the 2012 start of the Ter­ra­Mar Project.

...

In 2013, Ms. Maxwell went to Reyk­javik and par­tic­i­pat­ed in a con­fer­ence for the Arc­tic Cir­cle. Scott Borg­er­son, a for­mer Coast Guard offi­cer and a one­time Coun­cil on For­eign Rela­tions fel­low, also attend­ed. He also appeared with her at the 2014 talk for the C.F.R, and accord­ing to numer­ous friends of Ms. Maxwell, became her boyfriend. (Three of those friends said she lat­er described him to them as a “Navy SEAL.” Mr. Borg­er­son declined to com­ment.)

Around that time, the Clin­ton Glob­al Ini­tia­tive announced a “com­mit­ment to action” from the Ter­ra­Mar Project. Lit­tle evi­dence exists that it amount­ed to much.
...

But the ques­tions about Ter­ra­Mar aren’t lim­it­ed to ques­tions about whether or not it actu­al­ly did any­thing. There’s also the ques­tion of where all the mon­ey went. Accord­ing to tax fil­ings, the group was pay­ing out more than it took it — using $550k in loans from Maxwell — but those fil­ings don’t indi­cate what the mon­ey was actu­al­ly spent on. Except for unusu­al­ly high account­ing and legal fees:

...
Accord­ing to tax fil­ings from 2013 to 2017, the orga­ni­za­tion gave out no mon­ey in grants. A rep­re­sen­ta­tive for the Ter­ra­Mar Project said in a state­ment that the work of the orga­ni­za­tion includ­ed help­ing orga­nize the March for the Ocean in Wash­ing­ton, a cam­paign to reduce the num­ber of lit­tered cig­a­rette butts and pub­li­ca­tion of The Dai­ly Catch, an ocean­ic con­ser­va­tion newslet­ter. The Ter­ra­Mar Project also obtained a part­ner­ship with the lux­u­ry bed­ding com­pa­ny Yves Delorme on a col­lec­tion of “water-inspired” sheets, pil­low­cas­es and com­forters.

...

The tax returns of the Ter­ra­Mar Project show that between 2013 and 2017 the orga­ni­za­tion received $196,000 in pub­lic sup­port and paid out, in var­i­ous expens­es, more than $600,000, requir­ing loans from its pres­i­dent, Ms. Maxwell, total­ing $549,093.

The fil­ings do not pro­vide names of the firms or indi­vid­u­als to whom those pay­ments were made; no pro­grams were start­ed for work in the field. No grants were giv­en.

“Over all these returns, not a sin­gle dol­lar,” said Mike Crab­tree, a tax part­ner at Boulay, a C.P.A. firm in Min­neapo­lis. “The returns don’t real­ly show what’s going on, where the mon­ey is going and what it’s being used for.”

In 2014, TerraMar’s account­ing and legal fees were more than $50,000, an unusu­al­ly high num­ber giv­en the size and activ­i­ty of the orga­ni­za­tion, accord­ing to Mr. Crab­tree. “I don’t know if ‘sus­pi­cious’ is the word I’d use, but to gen­er­ate those kinds of fees a lot more would have to be going on than this would reflect,” he said.
...

So was Ter­ra­Mar basi­cal­ly doing noth­ing with all that mon­ey, most of which was pro­vid­ed by Maxwell her­self? Or was the mon­ey going towards oth­er even shadier projects? That’s one of the many ques­tions about this oper­a­tion that we’ll prob­a­bly nev­er real­ly have answered. But giv­en all of Jef­frey Epstein’s inter­est in strange high-tech ven­tures and caus­es, it’s hard to ignore the pos­si­bil­i­ty that Ter­ra­Mar was used a front to finance some of those projects.

Or per­haps Ter­ra­Mar was oper­at­ing in part as some sort of intel­li­gence front? Recall how Jef­frey Epstein’s intel­li­gence con­nec­tions appeared to be so sig­nif­i­cant in 2017 that report­ed­ly Steve Ban­non viewed Epstein as a pos­si­ble replace­ment for Ban­non’s lost access to intel­li­gence sources after Ban­non was kicked out of the Trump White House. Was Ter­ra­Mar’s embrace by the estab­lish­ment a reflec­tion of an ongo­ing Epstein-relat­ed intel­li­gence rela­tion­ship?

Beyond Epstein’s mys­te­ri­ous intel­li­gence con­nec­tions is his bizarre rela­tion­ship to glob­al sci­en­tif­ic lead­ers and the role he was play­ing as a kind of tran­shu­man­ism sug­ar-dad­dy keen on pro­mot­ing a neo-eugen­ics agen­da. Recall how one of Epsteine’s key con­nec­tions to the sci­en­tif­ic com­mu­ni­ty came through lit­er­ary agent John Brock­man and Brock­man’s Edge Foun­da­tion, which would pair sci­en­tists and authors with poten­tial bene­fac­tor. As an exam­ple of the types of peo­ple involved with Brockman’s match-mak­ing, in 2004, Brock­man host­ed a din­ner were Epstein was intro­duced to var­i­ous sci­en­tists. Also at the din­ner were Jeff Bezos, Sergey Brin, and Lar­ry Page. Was Ter­ra­Mar oper­at­ing as a kind of oceano­graph­ic exten­sion of Epstein’s inter­est in high-tech research?

And that brings us Dr. Nathan Wolfe’s rela­tion­ship to this net­work. Not only is Wolfe a mem­ber of Brockmah’s Edge Foun­da­tion, but he was also a “found­ing cit­i­zen” of Ter­ra­Mar. That’s was described in the fol­low­ing 2012 piece for TreeHugger.com cel­e­brat­ing the Ter­ra­Mar launch. It’s not entire­ly clear when exact­ly the piece was pub­lished (that info no where to be found on the site) but it was clear­ly pub­lished some time in the fall of 2012 fol­low­ing the Sep­tem­ber 26 launch of Ter­ra­Mar. And as we’re going to see in this write up of the wvent, Dr Wolfe was there at the launch event as one of four cel­e­brat­ed marine expert “found­ing cit­i­zens”. So while we don’t quite know what Dr Wolfe’s rela­tion­ship was with Jef­frey Epstein, we can con­fi­dent­ly con­clude Wolfe was in Epstein’s orbit:

Tree­hug­ger

Ter­ra­Mar Project Launch­es to Cel­e­brate and Pro­tect the World’s Oceans

By John Platt
Updat­ed August 15, 2019

Did you know that most of the world’s oceans belong to you? It’s true: 64 per­cent of the waters that exist out­side of nation­al juris­dic­tions are known as the high seas. Accord­ing to the Unit­ed Nation­al Law of the Sea Con­ven­tion, these unreg­u­lat­ed bod­ies of water — and the fish and min­er­als they con­tain — belong to all of mankind and should be used to serve the com­mon good.

A non­prof­it, The Ter­ra­Mar Project, aims to cel­e­brate and pro­tect those high seas. Offi­cial­ly launched Sept. 26 at the Blue Ocean Film Fes­ti­val & Con­ser­va­tion Con­fer­ence in Mon­terey, Cal­i­for­nia, the orga­ni­za­tion is the brain­child of life­long marine enthu­si­ast Ghis­laine Maxwell..

“Peo­ple tra­di­tion­al­ly see indi­vid­ual oceans and seas. The truth is that all the oceans are inter­con­nect­ed and relat­ed. It’s all one sea,” Maxwell says. “What Ter­ra­Mar wants to do is give this part of the world an iden­ti­ty.” An expe­ri­enced deep-sea div­er and ocean advo­cate, Maxwell says the goal of the orga­ni­za­tion is to inspire peo­ple to think of the ocean in a new way. “You can be attached to it. You can par­tic­i­pate in in a deep way. You can also have a say in how it is used.”

Maxwell has been plan­ning the launch of the Ter­ra­Mar Project for two years to fill what she per­ceives as a gap in how oth­er orga­ni­za­tions per­ceive the high seas. “There are a lot of peo­ple and orga­ni­za­tions doing good work in spe­cif­ic areas” — she names the Sar­gas­so Sea as one exam­ple — “but no one was look­ing at the high seas as one huge, homoge­nous place.”

The main way Ter­ra­Mar hopes to engage peo­ple is with its inter­ac­tive web­site, where vis­i­tors can claim a par­cel of the ocean, “friend” a marine species like green tur­tles or sea otters, take a vir­tu­al dive, or find edu­ca­tion­al projects for par­ents and teach­ers. “Social engage­ment is real­ly key,” says Saman­tha Har­ris, Ter­ra­Mar’s direc­tor of devel­op­ment. “That’s what we’re try­ing to devel­op here: a way to engage a large num­ber of peo­ple with the ocean by using our site.”

The spec­tac­u­lar vir­tu­al dive employs Google Ocean, which also pre­miered at the Blue Ocean fes­ti­val and pro­vides a sim­i­lar expe­ri­ence to the search engine’s pop­u­lar Street Views but on the ocean floor. “Google’s an amaz­ing com­pa­ny that wants peo­ple to use their tech­nol­o­gy,” Maxwell says. “Google Ocean makes the high seas super-attrac­tive and engag­ing, so we chose to show­case it on our site.”

The announce­ment about the non­prof­it came from four cel­e­brat­ed marine experts: Dr. Sylvia Ear­le, Capt. Don Walsh, Dan Laf­fo­ley and virus hunter Nathan Wolfe. Ear­le, and oceanog­ra­ph­er and explor­er-in-res­i­dence with the Nation­al Geo­graph­ic Soci­ety and founder of the Sylvia Ear­le Alliance, said at the time, “I am thrilled to be a found­ing cit­i­zen of Ter­ra­Mar and to cel­e­brate the vital sig­nif­i­cance of the high seas to all peo­ple, every­where.”

Laf­fo­ley, the marine vice chair for the IUC­N’s World Com­mis­sion on Pro­tect­ed Areas, said he saw an impor­tant role for the Ter­ra­Mar Project: “What this does is actu­al­ly enable peo­ple to con­nect to the deep blue heart of the world beyond nation­al juris­dic­tions, make it a coun­try, to make it the respon­si­bil­i­ty of every­one in a sense.”

...

The Ter­ra­Mar Project plans to roll out sev­er­al new fea­tures on its web­site to keep engag­ing vis­i­tors in the impor­tance of the high seas. The site will also fea­ture fundrais­ing tools to help raise mon­ey for ocean-relat­ed research or oth­er projects. “Not only will we be able to set indi­vid­ual spon­sor­ship goals for fundrais­ing for cer­tain projects, but our cit­i­zen users can then cre­ate their own projects for oth­er peo­ple to fundraise for,” devel­op­ment direc­tor Har­ris says.

“We invite every­body to come and inter­act with us,” Maxwell says. “The high seas belongs to you. It’s the one major area in the world where we can be one species with one home and one com­mon des­tiny.”

———-

“Ter­ra­Mar Project Launch­es to Cel­e­brate and Pro­tect the World’s Oceans” By John Platt; Tree­hug­ger; Update 08/15/2019

“The announce­ment about the non­prof­it came from four cel­e­brat­ed marine experts: Dr. Sylvia Ear­le, Capt. Don Walsh, Dan Laf­fo­ley and virus hunter Nathan Wolfe. Ear­le, and oceanog­ra­ph­er and explor­er-in-res­i­dence with the Nation­al Geo­graph­ic Soci­ety and founder of the Sylvia Ear­le Alliance, said at the time, “I am thrilled to be a found­ing cit­i­zen of Ter­ra­Mar and to cel­e­brate the vital sig­nif­i­cance of the high seas to all peo­ple, every­where.””

Between Dr. Wolfe’s role in the Edge Foun­da­tion and his Ter­rMar “found­ing cit­i­zen” sta­tus, we don’t real­ly have to ask whether or not Wolfe has met Jef­frey Epstein. It’s cir­cum­stan­tial­ly beyond obvi­ous that was the case. The ques­tion was have to ask is just close­ly did they end up work­ing togeth­er? Did Metabio­ta or its GVFI pre­cur­sor end up tak­ing any Epstein-affil­i­at­ed funds? We don’t know but for-prof­it virus-relat­ed projects sure sounds like the kind of cut­ting edge research Epstein would have poten­tial­ly been inter­est­ed in, espe­cial­ly giv­en his keen inter­est in eugen­ics.

Also note now lim­it­ed the whole Ter­ra­Mar project sound­ed with this 2012 launch: it was basi­cal­ly just a web­site about the ocean. Inter­est­ing­ly, it fea­tured a vir­tu­al dive using Google Ocean. Both Ter­ra­Mar and Google Ocean were launched at that same Sep­tem­ber 26, 2012 Blue Ocean Film Fes­ti­val. So we can rea­son­ably infer that Ter­ra­Mar had some sort of work­ing rela­tion­ship with Google:

...
A non­prof­it, The Ter­ra­Mar Project, aims to cel­e­brate and pro­tect those high seas. Offi­cial­ly launched Sept. 26 at the Blue Ocean Film Fes­ti­val & Con­ser­va­tion Con­fer­ence in Mon­terey, Cal­i­for­nia, the orga­ni­za­tion is the brain­child of life­long marine enthu­si­ast Ghis­laine Maxwell..

...

The main way Ter­ra­Mar hopes to engage peo­ple is with its inter­ac­tive web­site, where vis­i­tors can claim a par­cel of the ocean, “friend” a marine species like green tur­tles or sea otters, take a vir­tu­al dive, or find edu­ca­tion­al projects for par­ents and teach­ers. “Social engage­ment is real­ly key,” says Saman­tha Har­ris, Ter­ra­Mar’s direc­tor of devel­op­ment. “That’s what we’re try­ing to devel­op here: a way to engage a large num­ber of peo­ple with the ocean by using our site.”

The spec­tac­u­lar vir­tu­al dive employs Google Ocean, which also pre­miered at the Blue Ocean fes­ti­val and pro­vides a sim­i­lar expe­ri­ence to the search engine’s pop­u­lar Street Views but on the ocean floor. “Google’s an amaz­ing com­pa­ny that wants peo­ple to use their tech­nol­o­gy,” Maxwell says. “Google Ocean makes the high seas super-attrac­tive and engag­ing, so we chose to show­case it on our site.”
...

Again, recall how Google was one of the ear­ly pri­vate fun­ders of Dr. Wolfe’s Metabio­ta ini­tia­tive, and also how Sergey Brin and Lar­ry Page were involved with the net­work of sci­en­tif­ic lumi­nar­ies fig­ures around John Brock­man and the Edge Foun­da­tion. So when we learn that Google Ocean was appar­ent­ly mak­ing itself avail­able to Ter­ra­Mar in advance of its pub­lic launch and both were launched at the same event, it’s fur­ther con­fir­ma­tion of Google’s involve­ment in this net­work. A net­work which Dr. Nathan Wolfe was very much a part of. So we have to ask, does Metabio­ta have Epstein con­nec­tion? We don’t have hard evi­dence of this. But the cir­cum­stan­tial evi­dence abounds.

Final­ly, in rela­tion to the open ques­tion of what the mon­ey donat­ed to Ter­ra­Mar was actu­al­ly spent on, note how Ter­ra­Mar was­n’t just a web­site. It was also a plat­form for allow­ing indi­vid­u­als to set up their own fundrais­ing goals for their own ocean-relat­ed projects. In oth­er words, this would have made a fab­u­lous mon­ey-laun­der­ing front:

...
The Ter­ra­Mar Project plans to roll out sev­er­al new fea­tures on its web­site to keep engag­ing vis­i­tors in the impor­tance of the high seas. The site will also fea­ture fundrais­ing tools to help raise mon­ey for ocean-relat­ed research or oth­er projects. “Not only will we be able to set indi­vid­ual spon­sor­ship goals for fundrais­ing for cer­tain projects, but our cit­i­zen users can then cre­ate their own projects for oth­er peo­ple to fundraise for,” devel­op­ment direc­tor Har­ris says.
...

And if indeed Epstein was work­ing with Wolfe on the var­i­ous viral-relat­ed projects, we also have to ask if Epstein was at all aware of the pan­dem­ic insur­ance work. Epstein was a finance guy, after all. Mak­ing mon­ey from a glob­al pan­dem­ic sounds like exact­ly the kind of thing that would have been right up his ally. Well, that and killing off peo­ple the old and weak. Glob­al pan­demics have a lot of fea­tures that would have pre­sum­ably inter­est­ed Epstein; hence all the dis­turb­ing ques­tions.

USA Today had to remove 23 arti­cles by one of their young reporters as she was just mak­ing up sources and sto­ries. Of inter­est to me is that one of the sto­ries removed was a puff piece about Ukrain­ian women and their war efforts! Gee, could there be oth­er lies going on in regards to the West­ern media and Ukraine? Call me crazy...

https://www.msn.com/en-us/news/us/usa-today-removes-23-articles-says-reporter-fabricated-sources/ar-AAYz045

USA Today removed 23 news sto­ries from its web­site Thurs­day after an inter­nal audit con­clud­ed that the reporter who wrote them mis­at­trib­uted quotes and in some cas­es may have fab­ri­cat­ed inter­views and sources.

The break­ing news reporter, Gabriela Miran­da, has resigned from the news­pa­per and could not be reached for com­ment. USA Today has removed near­ly two dozen sto­ries she wrote between spring 2021 (“Tik­Tok bans ‘milk crate chal­lenge’ from its app, cit­ing con­cerns over dan­ger­ous acts”) and spring of this year (“‘This is my land, I stay’: These Ukrain­ian women are among thou­sands choos­ing to fight, not flee”).

USA Today released a list of the removed arti­cles as well as a brief account of its inves­ti­ga­tion into Miran­da, which the com­pa­ny said began with an “exter­nal cor­rec­tion request” sev­er­al weeks ago. The audit even­tu­al­ly broad­ened to encom­pass a wide swath of her report­ing, which focused on trend­ing top­ics and viral sto­ries.

“The audit revealed that some indi­vid­u­als quot­ed were not affil­i­at­ed with the orga­ni­za­tions claimed and appeared to be fab­ri­cat­ed,” the news­pa­per said in a state­ment. “The exis­tence of oth­er indi­vid­u­als quot­ed could not be inde­pen­dent­ly ver­i­fied. In addi­tion, some sto­ries includ­ed quotes that should have been cred­it­ed to oth­ers.”

A spokesper­son for USA Today’s par­ent com­pa­ny, Gan­nett, referred The Wash­ing­ton Post to the newspaper’s state­ment when asked for fur­ther details. The New York Times first report­ed that the pub­li­ca­tion had removed the sto­ries.

note: Here is the full Ukrain­ian women arti­cle. I am post­ing it in full text as it has been removed from USA Today and most of its affil­i­ates. How­ev­er, it was post­ed to the main pro-Ukraine red­dit page and kept there. Thanks, pro-Ukraini­ans, for keep­ing this sto­ry alive! With­out you I may nev­er have found it.

https://www.reddit.com/r/ukraine/comments/tnj9s9/this_is_my_land_i_stay_these_ukrainian_women_are/

FULL ARTICLE

Just last month, Olga Kovalenko moved into her first apart­ment in Kyiv, Ukraine, and got engaged to her long­time boyfriend. Now she spends morn­ings clean­ing her rifles and pulling peo­ple out of bomb-strick­en homes.

When Ukraine enact­ed mar­tial law and banned men 18 to 60 years old from leav­ing the coun­try after Rus­si­a’s Feb. 24 inva­sion, Kovalenko knew she’d nev­er for­give her­self if she left her home­land. She called her par­ents and vol­un­teered to join Ukraine’s mil­i­tary forces.

“I was­n’t about to leave all the sav­ing and defend­ing to the men. I may be a woman, but I have no chil­dren, and I’m ready to fight,” Kovalenko told USA TODAY. “This is my land, I stay.”

Kovalenko is one of thou­sands of Ukrain­ian women refus­ing to flee as bombs have raged and cities have been bom­bard­ed, stead­fast in their deci­sion to defend their beloved home and extin­guish Russ­ian Pres­i­dent Vladimir Putin’s hopes for a swift vic­to­ry. Women make up about 15% of Ukraine’s army, accord­ing to the Ukrain­ian gov­ern­ment.

Each day Kovalenko said her unit goes to dif­fer­ent cities that have been hit by Rus­si­a’s relent­less attacks. They eval­u­ate the dam­age, help evac­u­ate civil­ians and are ready to fend off Russ­ian forces. For­tu­nate­ly, Kovalenko has­n’t encoun­tered a Russ­ian sol­dier yet but said she would “do what’s nec­es­sary” to win the war.

Kovalenko was born in Kyiv to a Ukrain­ian moth­er and Russ­ian father – she said both her par­ents are proud. Her father even said he stands with Ukraine and is “dis­ap­point­ed” with the inva­sion.

“I’m dif­fer­ent, I’m half of each side in this war, but I choose to do what’s right. I choose to risk my life for my coun­try; it’s what my Ukrain­ian blood tells me to do,” Kovalenko said.

Make­up artist now wields weapons

Alona Bushyn­s­ka, an Odessa native who was once a make­up artist for 17 years, has trad­ed in her brush­es for med­ical sup­plies and weapons. A few months ago, her biggest wor­ry was sched­ul­ing her next client. Today it’s pro­tect­ing her unit and part­ners in a civil­ians task force in Ukraine.

Bushyn­s­ka said she decid­ed to join the war effort while she watched neigh­bor­hoods near Kyiv destroyed by Russ­ian forces. Each morn­ing, the task force wakes up to the sounds of bombs and brings med­ical sup­plies to sol­diers and civil­ians.

The task force oper­ates in units of two: One per­son pro­vides med­ical assis­tance while the oth­er is armed and ready to defend as need­ed. The task force is filled with dozens of women who chose to fight, Bushyn­s­ka said. Among them: for­mer jour­nal­ists, para­medics and teach­ers.

“We’re not pro­fes­sion­al war­riors, we are just civil­ians who stayed because we want to pro­tect our hous­es. We want there to be homes and build­ings for peo­ple to come back to,” Bushyn­s­ka told USA TODAY. “If I die, I die. But I want to stay.”

Ukraine has a long his­to­ry of female fight­ers

Women such as Kovalenko and Bushyn­s­ka are no dif­fer­ent than the thou­sands of female Ukrain­ian sol­diers who fought in World War I, in the Aus­tro-Hun­gar­i­an army, and in World War II, in the Red Army, Ukrain­ian vet­er­an Katery­na Pry­i­mak said.

Dur­ing Rus­si­a’s 2014 inva­sion of east­ern Ukraine, Pry­i­mak enlist­ed in the Ukrain­ian army and fought on the front lines to pro­tect the region. Now eight years lat­er, she’s defend­ing her coun­try in a new way – with med­ical sup­plies and vol­un­teers.

Pry­i­mak is the head of the Wom­en’s Vet­er­an Move­ment, an orga­ni­za­tion that pro­vides sup­port for vet­er­ans, and has set up a head­quar­ters in Kyiv. Dozens of women, many like Pry­i­mak, are para­medics. They pro­vide food, clothes and med­ical resources.

“Guns are not the only thing need­ed. Food, med­ical atten­tion and even a smile, that’s also what the women who have stayed behind pro­vide to the sol­diers and civil­ians,” Pry­i­mak said.

She said she knows of thou­sands of women who have joined the fight against the Russ­ian inva­sion – and she’s not sur­prised. Since 2014 and before, women have shown they are just as capa­ble of brav­ery as their male coun­ter­parts, she said.

Bushyn­s­ka said she will con­tin­ue to fight with oth­er civil­ians for as long as it takes. Kovalenko will defend Ukraine until her “last breaths.”

“Men don’t always have to fight and women don’t always have to sit at home and wait,” Kovalenko said. “We are here to help and we’ll stay here until the war is over, until my last breath if need­ed.”
52

Here’s a pair of arti­cles relat­ed to the fas­ci­nat­ing sto­ry about Metabio­ta’s part­ner­ship with Munich Re to pro­vide a kind of pan­dem­ic insur­ance ser­vice. As we’ve seen, part of what made that sto­ry so fas­ci­nat­ing is that Metabio­ta was, at its core, an cre­ation of the US nation­al secu­ri­ty state and Sil­i­con Val­ley. It’s not exact­ly the kind of back­ground one would nec­es­sar­i­ly expect for a com­pa­ny part­ner­ing with a Ger­man insur­ance giant. So what’s going on there?

Well...Surprise! It turns out the CIA was a part of that whole Munich Re part­ner­ship. As we’re going to see, the CIA’s ven­ture cap­i­tal firm, In-Q-Tel, was pub­licly tout­ing the joint ven­ture with Munich Re and Metabio­ta back in 2017. So this planned new sec­tor of the insur­ance indus­try — a sec­tor that would poten­tial­ly blunt the eco­nom­ic impact of glob­al pan­demics (in part by shunt­ing the costs onto pen­sion funds) — was planned by the CIA.

And as we’re going to see in the fol­low­ing Vox.com arti­cle from Jan 28, 2020 — the first month of the pan­dem­ic — there’s anoth­er aspect to Metabio­ta’s ser­vices that has an obvi­ous intel­li­gence appli­ca­tions but is report­ed­ly also being offered to clients in the insur­ance indus­try like Munich Re: Big Data real-time analy­sis of an array of infor­ma­tion streams, includ­ing data min­ing social media. The idea is that infor­ma­tion indi­cat­ing the emer­gence of a pan­dem­ic can be gleaned by sur­veilling social media posts. But it’s far from lim­it­ed to social media posts. It sounds like the idea is to basi­cal­ly turn Metabio­ta into a kind of Palan­tir-like Big Data enti­ty with a focus on dis­ease out­breaks. Of course, as we’ve seen, Palan­tir itself has already played report­ed­ly been play­ing Big Data pan­dem­ic sur­veil­lance roles for the US gov­ern­ment, and that gets at the obvi­ous intel­li­gence-relat­ed appli­ca­tions for Metabio­ta’s ser­vices. A sys­tem that allows you to pre­dict emerg­ing dis­eases can prob­a­bly help you pre­dict a lot of oth­er things. And that sys­tem was being joint­ly devel­oped by the CIA and Munich RE.

Ok, first, here’s a Jan 28, 2020, arti­cle in Vox.com. Note how the arti­cle is writ­ten as part of Vox’s “Open Sourced” cat­e­go­ry of arti­cles that are made in con­junc­tion with the Omid­yar Net­work. The arti­cle is about how AI-dri­ven pan­dem­ic pre­dic­tion sys­tems helped to spot the emerg­ing coro­n­avirus pan­dem­ic days before the offi­cial CDC and WHO announce­ments. Although it was­n’t Metabio­ta’s AI that made this ear­ly pre­dic­tion. It was Metabio­ta’s Cana­di­an com­peti­tor, Blue­Dot, that made the ear­ly call:

Vox
Open Sourced

How AI is bat­tling the coro­n­avirus out­break

AI helped spot an ear­ly warn­ing about the out­break, and researchers have used flight trav­el­er data to fig­ure out where the nov­el coro­n­avirus could pop up next.

By Rebec­ca Heil­weil
Jan 28, 2020, 1:50pm EST

When a mys­te­ri­ous ill­ness first pops up, it can be dif­fi­cult for gov­ern­ments and pub­lic health offi­cials to gath­er infor­ma­tion quick­ly and coor­di­nate a response. But new arti­fi­cial intel­li­gence tech­nol­o­gy can auto­mat­i­cal­ly mine through news reports and online con­tent from around the world, help­ing experts rec­og­nize anom­alies that could lead to a poten­tial epi­dem­ic or, worse, a pan­dem­ic. In oth­er words, our new AI over­lords might actu­al­ly help us sur­vive the next plague.

These new AI capa­bil­i­ties are on full dis­play with the recent coro­n­avirus out­break, which was iden­ti­fied ear­ly by a Cana­di­an firm called Blue­Dot, which is one of a num­ber of com­pa­nies that use data to eval­u­ate pub­lic health risks. The com­pa­ny, which says it con­ducts “auto­mat­ed infec­tious dis­ease sur­veil­lance,” noti­fied its cus­tomers about the new form of coro­n­avirus at the end of Decem­ber, days before both the US Cen­ters for Dis­ease Con­trol and Pre­ven­tion (CDC) and the World Health Orga­ni­za­tion (WHO) sent out offi­cial notices, as report­ed by Wired. Now near­ing the end of Jan­u­ary, the res­pi­ra­to­ry virus that’s been linked to the city of Wuhan in Chi­na has already claimed the lives of more than 100 peo­ple. Cas­es have also popped up in sev­er­al oth­er coun­tries, includ­ing the Unit­ed States, and the CDC is warn­ing Amer­i­cans to avoid non-essen­tial trav­el to Chi­na.

Kam­ran Khan, an infec­tious dis­ease physi­cian and BlueDot’s founder and CEO, explained in an inter­view how the company’s ear­ly-warn­ing sys­tem uses arti­fi­cial intel­li­gence, includ­ing nat­ur­al-lan­guage pro­cess­ing and machine learn­ing, to track over 100 infec­tious dis­eases by ana­lyz­ing about 100,000 arti­cles in 65 lan­guages every day. That data helps the com­pa­ny know when to noti­fy its clients about the poten­tial pres­ence and spread of an infec­tious dis­ease.

Oth­er data, like trav­el­er itin­er­ary infor­ma­tion and flight paths, can help give the com­pa­ny addi­tion­al hints about how a dis­ease will like­ly spread. For instance, ear­li­er this month, Blue­Dot researchers pre­dict­ed oth­er cities in Asia where the coro­n­avirus would show up after it appeared in main­land Chi­na.

The idea behind BlueDot’s mod­el (whose final results are sub­se­quent­ly ana­lyzed by human researchers) is to get infor­ma­tion to health care work­ers as quick­ly as pos­si­ble, with the hope that they can diag­nose — and, if need­ed, iso­late — infect­ed and poten­tial­ly con­ta­gious peo­ple ear­ly on.

...

Khan added that his sys­tem can also use an array of oth­er data — such as infor­ma­tion about an area’s cli­mate, tem­per­a­ture, or even local live­stock — to pre­dict whether some­one infect­ed with a dis­ease is like­ly to cause an out­break in that area. He points out that, back in 2016, Blue­Dot was able to pre­dict the appear­ance of the Zika virus in Flori­da six months before it actu­al­ly showed up there.

Sim­i­lar­ly, the epi­dem­ic-mon­i­tor­ing com­pa­ny Metabio­ta deter­mined that Thai­land, South Korea, Japan, and Tai­wan had the high­est risk of see­ing the virus show up more than a week before cas­es in those coun­tries were actu­al­ly report­ed, par­tial­ly by look­ing to flight data. Metabio­ta, like Blue­Dot, uses nat­ur­al-lan­guage pro­cess­ing to eval­u­ate online reports about a poten­tial dis­ease, and it’s also work­ing on devel­op­ing the same tech­nol­o­gy for social media data.

Mark Gal­li­van, Metabiota’s data sci­ence direc­tor, explains that online plat­forms and forums can also give an indi­ca­tion that there’s a risk of an epi­dem­ic. Metabio­ta also claims it can esti­mate the risk of a disease’s spread caus­ing social and polit­i­cal dis­rup­tion, based on infor­ma­tion like an illness’s symp­toms, mor­tal­i­ty rate, and the avail­abil­i­ty of treat­ment. For instance, at the time of this article’s pub­li­ca­tion, Metabio­ta rat­ed the risk of the nov­el coro­n­avirus caus­ing pub­lic anx­i­ety as “high” in the US and Chi­na, but it rat­ed this risk for the mon­key­pox virus in the Demo­c­ra­t­ic Repub­lic of the Con­go (where there have been report­ed cas­es of that virus) as “medi­um.”

It’s hard to know just how accu­rate this rat­ing sys­tem or the plat­form itself can be, but Gal­li­van says the com­pa­ny is work­ing with the US intel­li­gence com­mu­ni­ty and the Defense Depart­ment on issues relat­ed to the coro­n­avirus. This is part of Metabiota’s work with In-Q-Tel, the non­prof­it ven­ture firm asso­ci­at­ed with the Cen­tral Intel­li­gence Agency. But gov­ern­ment agen­cies aren’t the only poten­tial clients of these sys­tems. Metabio­ta also adver­tis­es its plat­form to rein­sur­ance com­pa­nies — rein­sur­ance is essen­tial­ly insur­ance for insur­ance com­pa­nies — that might want to man­age the finan­cial risks asso­ci­at­ed with a disease’s poten­tial spread.

But arti­fi­cial intel­li­gence can be far more use­ful than just keep­ing epi­demi­ol­o­gists and offi­cials informed as a dis­ease pops up. Researchers have built AI-based mod­els that can pre­dict out­breaks of the Zika virus in real time, which can inform how doc­tors respond to poten­tial crises. Arti­fi­cial intel­li­gence could also be used to guide how pub­lic health offi­cials dis­trib­ute resources dur­ing a cri­sis. In effect, AI stands to be a new first line of defense against dis­ease.

More broad­ly, AI is already assist­ing with research­ing new drugs, tack­ling rare dis­eases, and detect­ing breast can­cer. AI was even used to iden­ti­fy insects that spread Cha­gas, an incur­able and poten­tial­ly dead­ly dis­ease that has infect­ed an esti­mat­ed 8 mil­lion peo­ple in Mex­i­co and Cen­tral and South Amer­i­ca. There’s also increas­ing inter­est in using non-health data — like social media posts — to help health pol­i­cy­mak­ers and drug com­pa­nies under­stand the breadth of a health cri­sis. For instance, AI that can mine social media posts to track ille­gal opi­oid sales, and keep pub­lic health offi­cials informed about these con­trolled sub­stances’ spread.

These sys­tems, includ­ing Metabiota’s and BlueDot’s, are only as good as the data they’re eval­u­at­ing. And AI — gen­er­al­ly — has a prob­lem with bias, which can reflect both the engi­neers of a sys­tem and the data it’s trained on. And AI that’s used with­in health care is by no means immune to that prob­lem.

Still, all of these advance­ments rep­re­sent a more opti­mistic out­look for what AI can do. Typ­i­cal­ly, news of AI robots sift­ing through large swathes of data doesn’t sit so well. Think of law enforce­ment using facial recog­ni­tion data­bas­es built on images mined from across the web. Or hir­ing man­agers who can now use AI to pre­dict how you’ll behave at work, based on your social media posts. The idea of AI bat­tling dead­ly dis­ease offers a case where we might feel slight­ly less uneasy, if not alto­geth­er hope­ful. Per­haps this tech­nol­o­gy — if devel­oped and used prop­er­ly — could actu­al­ly help save some lives.

Open Sourced is made pos­si­ble by Omid­yar Net­work. All Open Sourced con­tent is edi­to­ri­al­ly inde­pen­dent and pro­duced by our jour­nal­ists.

———–

“How AI is bat­tling the coro­n­avirus out­break” by Rebec­ca Heil­weil; Vox; 01/28/2020

“These new AI capa­bil­i­ties are on full dis­play with the recent coro­n­avirus out­break, which was iden­ti­fied ear­ly by a Cana­di­an firm called Blue­Dot, which is one of a num­ber of com­pa­nies that use data to eval­u­ate pub­lic health risks. The com­pa­ny, which says it con­ducts “auto­mat­ed infec­tious dis­ease sur­veil­lance,” noti­fied its cus­tomers about the new form of coro­n­avirus at the end of Decem­ber, days before both the US Cen­ters for Dis­ease Con­trol and Pre­ven­tion (CDC) and the World Health Orga­ni­za­tion (WHO) sent out offi­cial notices, as report­ed by Wired. Now near­ing the end of Jan­u­ary, the res­pi­ra­to­ry virus that’s been linked to the city of Wuhan in Chi­na has already claimed the lives of more than 100 peo­ple. Cas­es have also popped up in sev­er­al oth­er coun­tries, includ­ing the Unit­ed States, and the CDC is warn­ing Amer­i­cans to avoid non-essen­tial trav­el to Chi­na.”

Blue­Dot’s AI-dri­ven pan­dem­ic sur­veil­lance ser­vices were already on the case at the end of Decem­ber 2019, days before the CDC and WHO sent out their first notices of a nov­el coro­n­avirus. Its Big Data approach to detect­ing pan­demics and pre­dict­ing their spread by rely­ing on a range of infor­ma­tion sources — like plane tick­et sales — got a major val­i­da­tion.

But Blue­Dot was­n’t the only com­pa­ny engaged in this Big Data pan­dem­ic sur­veil­lance. Metabio­ta was tout­ing its work with the US intel­li­gence com­mu­ni­ty as part of Metabio­ta’s work with the CIA’s ven­ture cap­i­tal firm In-Q-Tel. Work that includes devel­op­ing social media sur­veil­lance capa­bil­i­ties:

...
Sim­i­lar­ly, the epi­dem­ic-mon­i­tor­ing com­pa­ny Metabio­ta deter­mined that Thai­land, South Korea, Japan, and Tai­wan had the high­est risk of see­ing the virus show up more than a week before cas­es in those coun­tries were actu­al­ly report­ed, par­tial­ly by look­ing to flight data. Metabio­ta, like Blue­Dot, uses nat­ur­al-lan­guage pro­cess­ing to eval­u­ate online reports about a poten­tial dis­ease, and it’s also work­ing on devel­op­ing the same tech­nol­o­gy for social media data.

Mark Gal­li­van, Metabiota’s data sci­ence direc­tor, explains that online plat­forms and forums can also give an indi­ca­tion that there’s a risk of an epi­dem­ic. Metabio­ta also claims it can esti­mate the risk of a disease’s spread caus­ing social and polit­i­cal dis­rup­tion, based on infor­ma­tion like an illness’s symp­toms, mor­tal­i­ty rate, and the avail­abil­i­ty of treat­ment. For instance, at the time of this article’s pub­li­ca­tion, Metabio­ta rat­ed the risk of the nov­el coro­n­avirus caus­ing pub­lic anx­i­ety as “high” in the US and Chi­na, but it rat­ed this risk for the mon­key­pox virus in the Demo­c­ra­t­ic Repub­lic of the Con­go (where there have been report­ed cas­es of that virus) as “medi­um.”

It’s hard to know just how accu­rate this rat­ing sys­tem or the plat­form itself can be, but Gal­li­van says the com­pa­ny is work­ing with the US intel­li­gence com­mu­ni­ty and the Defense Depart­ment on issues relat­ed to the coro­n­avirus. This is part of Metabiota’s work with In-Q-Tel, the non­prof­it ven­ture firm asso­ci­at­ed with the Cen­tral Intel­li­gence Agency. But gov­ern­ment agen­cies aren’t the only poten­tial clients of these sys­tems. Metabio­ta also adver­tis­es its plat­form to rein­sur­ance com­pa­nies — rein­sur­ance is essen­tial­ly insur­ance for insur­ance com­pa­nies — that might want to man­age the finan­cial risks asso­ci­at­ed with a disease’s poten­tial spread.

...
More broad­ly, AI is already assist­ing with research­ing new drugs, tack­ling rare dis­eases, and detect­ing breast can­cer. AI was even used to iden­ti­fy insects that spread Cha­gas, an incur­able and poten­tial­ly dead­ly dis­ease that has infect­ed an esti­mat­ed 8 mil­lion peo­ple in Mex­i­co and Cen­tral and South Amer­i­ca. There’s also increas­ing inter­est in using non-health data — like social media posts — to help health pol­i­cy­mak­ers and drug com­pa­nies under­stand the breadth of a health cri­sis. For instance, AI that can mine social media posts to track ille­gal opi­oid sales, and keep pub­lic health offi­cials informed about these con­trolled sub­stances’ spread.

These sys­tems, includ­ing Metabiota’s and BlueDot’s, are only as good as the data they’re eval­u­at­ing. And AI — gen­er­al­ly — has a prob­lem with bias, which can reflect both the engi­neers of a sys­tem and the data it’s trained on. And AI that’s used with­in health care is by no means immune to that prob­lem.
...

And that points towards one of the more fas­ci­nat­ing aspects of Metabio­ta’s ser­vices: it’s effec­tive­ly a Big Data sur­veil­lance plat­form. Any­thing that can help pre­dict pan­demics is fair game. Which is obvi­ous­ly a lot of poten­tial infor­ma­tion with a poten­tial uses that goes far beyond pan­dem­ic pre­dic­tion. In oth­er words, pan­dem­ic pre­dic­tion is a great cov­er sto­ry for gen­er­al mass sur­veil­lance.

Now, we don’t have to won­der whether or not intel­li­gence ser­vices have an inter­est in mass sur­veil­lance. But how about Metabio­ta’s pri­vate sec­tor clients? Espe­cial­ly its part­ners in the rein­sur­ance indus­try like Munich Re? Should we expect insur­ance com­pa­nies to start buy­ing access to Metabio­ta’s social media data min­ing tools as part of a pan­dem­ic sur­veil­lance ser­vice? It seems plau­si­ble. And that brings us to the 2017 announce­ment on In-Q-Tel’s own web­site about its part­ner­ship with Metabio­ta. A part­ner­ship that includ­ed Munich Re and plans for offer­ing pan­dem­ic insur­ance ser­vices. That’s right, it turns out the pan­dem­ic insur­ance side of Metabio­ta’s busi­ness isn’t sep­a­rate from its work with the US nation­al secu­ri­ty state and the CIA. In-Q-Tel is a part­ner with Metabio­ta and Munich Re in pro­vid­ing pan­dem­ic pre­dic­tion ser­vices for the rein­sur­ance indus­try:

IQT.com

Munich Re & In-Q-Tel Select Metabio­ta to Gain Deep­er Insights into Epi­dem­ic Risk and Glob­al Pre­pared­ness for Infec­tious Dis­eases

Metabio­ta Launch­es First Com­mer­cial Risk Mod­el­ing Plat­form and Pre­pared­ness Index to Help Insur­ers Under­stand and Under­write Epi­dem­ic Risk

August 22, 2017

Today, Metabio­ta, the pio­neer in epi­dem­ic risk mod­el­ing, announced that two mar­ket inno­va­tors, Munich Rein­sur­ance Com­pa­ny, the largest glob­al rein­sur­er and lead­ing expert on glob­al risk solu­tions and In-Q-Tel, Inc. (IQT), the strate­gic investor that accel­er­ates the devel­op­ment of tech­nolo­gies to sup­port the U.S. intel­li­gence com­mu­ni­ty, have signed strate­gic agree­ments with Metabio­ta.

The news comes as Metabio­ta com­mer­cial­ly launch­es the industry’s first ever plat­form for esti­mat­ing epi­dem­ic pre­pared­ness and risk, includ­ing the fre­quen­cy, sever­i­ty, dura­tion and cost of out­breaks. With a pow­er­ful com­bi­na­tion of epi­dem­ic risk ana­lyt­ics, his­tor­i­cal data, dis­ease sce­nar­ios and insights from pub­lic health ana­lysts and glob­al epi­demi­ol­o­gists, Metabiota’s plat­form is enabling the insur­ance indus­try to offer new epi­dem­ic insur­ance solu­tions by deliv­er­ing capa­bil­i­ties that allow insur­ers to bet­ter under­stand and under­write risk.

Near­ly 100 years since the dead­liest pan­dem­ic in his­to­ry afflict­ed one-third of the glob­al pop­u­la­tion, the world is still vul­ner­a­ble to health risks, as evi­denced by recent out­breaks of Zika, Avian Influen­za, Ebo­la and the resur­gence of pre­vi­ous­ly dor­mant virus­es like Measles and Cholera. In addi­tion to its impact on human health, infec­tious dis­eases inflict a tremen­dous eco­nom­ic toll on nation­al infra­struc­tures. The Zika virus alone could end up cost­ing Latin Amer­i­ca and the Caribbean up to $18 bil­lion, accord­ing to a report from the Unit­ed Nations. Metabiota’s plat­form is help­ing gov­ern­ments and orga­ni­za­tions to bet­ter under­stand the threats posed by future out­breaks, while pro­vid­ing them with the data and mod­el­ing tools need­ed to gauge the poten­tial finan­cial impact of a major health event.

“We believe that when risk can be prop­er­ly assessed and mit­i­gat­ed by insur­ance, the world will be more pre­pared and able to man­age these events,” said Bill Rossi, CEO of Metabio­ta. “At the same time, we’re help­ing the insur­ance indus­try build new rev­enue streams at a time when their core busi­ness is under threat by new busi­ness mod­els and tech­nolo­gies. Metabiota’s use of big data and soft­ware to mod­el epi­demics is tru­ly rev­o­lu­tion­iz­ing the insur­ance indus­try.”

With an intu­itive, cloud-based plat­form, Metabio­ta is pro­vid­ing risk man­agers and under­writ­ers with unprece­dent­ed insight into how dis­eases prop­a­gate and help them quan­ti­fy the risk posed by epi­demics. The plat­form brings togeth­er a 100-year his­tor­i­cal dis­ease data­base with a unique cat­a­log of more than 20 mil­lion risk sce­nar­ios describ­ing the num­ber of cas­es, deaths, hos­pi­tal­iza­tions, and employ­ee absence relat­ed to an epi­dem­ic event.

“Metabiota’s ana­lyt­ics and intel­li­gence help us to push the bound­aries of insur­a­bil­i­ty by pro­tect­ing com­pa­nies and local economies from the finan­cial loss relat­ed to epi­demics”, said Tom van den Brulle, Head of inno­va­tion, Munich Re. “This real­ly is the next fron­tier for the insur­ance indus­try – giv­en the high risk of infec­tious dis­ease out­breaks, it is imper­a­tive that we find new ways to man­age and finance these risks for our cus­tomers.”

“Infec­tious dis­ease out­breaks present a grow­ing secu­ri­ty threat to the Unit­ed States,” said Eugene Chiu, Part­ner, Invest­ments, IQT. “Metabio­ta pro­vides capa­bil­i­ties to bet­ter under­stand infec­tious dis­ease risk via open source data fusion and sophis­ti­cat­ed epi­dem­ic sim­u­la­tions.”

Metabiota’s inno­v­a­tive approach to data includes a pro­pri­etary glob­al pre­pared­ness index that mea­sures nation­al capac­i­ty to detect and respond to out­breaks. The Metabio­ta Pre­pared­ness Index empow­ers the insur­ance indus­try with more intel­li­gence into how each coun­try (and neigh­bor­ing coun­tries) are equipped to man­age a health cri­sis, based on pub­lic health infra­struc­ture, phys­i­cal and com­mu­ni­ca­tions infra­struc­ture, bureau­crat­ic and pub­lic man­age­ment capac­i­ties, finan­cial resources to under­write dis­ease response, and risk com­mu­ni­ca­tion. The World Bank has ref­er­enced this Index as a pos­si­ble way to bet­ter assess the future of risk.

...

———-

“Munich Re & In-Q-Tel Select Metabio­ta to Gain Deep­er Insights into Epi­dem­ic Risk and Glob­al Pre­pared­ness for Infec­tious Dis­eases”; IQT.com; 08/22/2017

““Infec­tious dis­ease out­breaks present a grow­ing secu­ri­ty threat to the Unit­ed States,” said Eugene Chiu, Part­ner, Invest­ments, IQT. “Metabio­ta pro­vides capa­bil­i­ties to bet­ter under­stand infec­tious dis­ease risk via open source data fusion and sophis­ti­cat­ed epi­dem­ic sim­u­la­tions.””

Open source data fusion. That’s part of what In-Q-Tel was tout­ing with this 2017 announce­ment that In-Q-Tel and Munich Re were team­ing up with Metabio­ta to devel­op this new sec­tor of the insur­ance indus­try. It’s a fas­ci­nat­ing twist in this whole sto­ry: the CIA teamed up with a Ger­man Rein­sur­ance giant to try to cre­ate a new sec­tor of the insur­ance indus­try that would osten­si­bly blunt the eco­nom­ic impact of pan­demics. There’s no short­age of ques­tions raised by all that.

But then there’s the ques­tion raised by the sto­ry of how Blue Dot detect­ed the pan­dem­ic before every­one else: So what about Metabio­ta sys­tem on Decem­ber 2019? Blue­Dot’s Big Data AI sys­tem detect­ed the coro­n­avirus out­break ear­ly at the end of that month. Well, recall how that Wired arti­cle describ­ing the Munich Re pan­dem­ic insur­ance plan indi­cat­ed that Metabio­ta’s sys­tems were flash­ing major warn­ing signs about a hot spot in Wuhan on Decem­ber 31, 2019, the same day Blue­Dot noti­fied its clients. Of course, inter­na­tion­al news reports about a mys­te­ri­ous res­pi­ra­to­ry virus in Wuhan was already hit­ting the news wires on Decem­ber 30, 2019. So there was­n’t any sophis­ti­cat­ed big data analy­sis required to make these ear­ly calls. It was in the news. Which still rais­es the ques­tion of how Blue­Dot beat Metabio­ta to the punch. You have to won­der if its deep ties to the very same inter­na­tion­al Pen­ta­gon-fund­ed net­work that was con­duct­ing gain-of-func­tion exper­i­ments on coro­n­avirus­es in at the WIV in Wuhan had any­thing to do with it.

Here’s a pair of arti­cles relat­ed to Munich Re’s devel­op­ment of pan­dem­ic insur­ance in coor­di­na­tion with Metabio­ta and the CIA’s In-Q-Tel ven­ture cap­i­tal firm. It appears that the war in Ukraine has prompt­ed Munich Re to take anoth­er active role in shap­ing anoth­er emerg­ing area of the insur­ance mar­kets: Cyber-attack insur­ance. With Rus­si­a’s inva­sion of Ukraine being seen as a poten­tial trig­ger for cyber attacks that could rip­ple across the globe, some sort of clar­i­ty for whether or not cyber-insur­ance poli­cies would cov­er such attacks is required. As we’re going to see, most cyber-attack insur­ance con­tains exclu­sion claus­es for war-relat­ed attacks. So is an attack that appears to emanate out of Ukraine or Rus­sia con­sid­ered an act of war? That’s unclear and it’s the kind of ambi­gu­i­ty that could lead to indus­try-wide headaches and law­suits should some sort of cyber-night­mare sit­u­a­tion play out.

What isn’t men­tioned in the arti­cles but worth keep­ing in mind here is how cyber-insur­ance par­al­lels pan­dem­ic insur­ance in terms of the unusu­al dan­gers it pos­es to insur­ers them­selves: while bad weath­er is unlike­ly to hit the entire plan­et at once, pan­demics are glob­al in nature. And as we’ve seen with cyber events like the Solar­Winds or Microsoft Exchange Mega-hacks, cyber events are glob­al in nature too. So we have Munich Re once again attempt to lead the indus­try in the cre­ation of a new insur­ance mar­ket with these unusu­al glob­al char­ac­ter­is­tics. As such, we should­n’t be too sur­prised to learn that Munich Re has a sim­i­lar solu­tion in mind for how the indus­try can sur­vive pay­out out dur­ing a large scale event: by using gov­ern­ments as a back­stop. Yep, gov­ern­ment pay­outs for major cyber attacks. That’s the insur­ance indus­try’s mas­ter plan. Or at least Munich Re’s plan. And Munich Re appears to be the com­pa­ny attempt­ing to lead the indus­try into arriv­ing at some sort of com­mon solu­tion.

So when we learn that Munich Re — which has already been work­ing with the CIA to devel­op pan­dem­ic insur­ance — is also work­ing on har­mo­niz­ing the indus­try’s cyber-insur­ance sec­tor ASAP in response to the war in Ukraine, and this is all hap­pen­ing a year after the mega-hacks of 2021 that affect­ed almost every major cor­po­rate net­work on the plan­et, that should prob­a­bly be tak­en as a cyber red flag. And just a gen­er­al red flag of upcom­ing major dis­rup­tions:

Reuters

Munich Re tight­ens up cyber insur­ance poli­cies to exclude war

By Car­olyn Cohn and Noor Zainab Hus­sain
April 8, 2022 4:46 PM CDT Updat­ed

LONDON, April 8 (Reuters) — Munich Re (MUVGn.DE) is plan­ning new word­ings in cyber insur­ance poli­cies to exclude war, to avoid dis­putes over what is cov­ered, the rein­sur­er’s top cyber under­writer told Reuters.

Rus­si­a’s inva­sion of Ukraine has raised fears of cyber attacks, with the risk that West­ern busi­ness­es or gov­ern­ment insti­tu­tions could be tar­get­ed.

Most cyber poli­cies cov­er com­pa­nies against busi­ness inter­rup­tion loss­es and the repair of hacked net­works fol­low­ing a cyber attack, but exclude war. How­ev­er, grey areas in the word­ings leave insur­ers open to claims as a result of cyber war. read more

S&P Glob­al said last week that insur­ance loss­es from the Ukraine con­flict could total $35 bil­lion, with cyber one of the class­es of insur­ance most exposed. read more

Munich Re is seek­ing clear­er war exclu­sion claus­es in cyber poli­cies, based on word­ing devel­oped last year in the Lloy­d’s of Lon­don mar­ket.

The inva­sion of Ukraine was not a “clas­sic cyber war,” said Juer­gen Rein­hart, chief under­writer, cyber, at Munich Re, but he said it was best to be pre­pared.

“Let’s not wait...but act now.”

Munich Re said last month it was wind­ing down busi­ness in Rus­sia.

AIG (AIG.N), one of the world’s biggest com­mer­cial insur­ers, is con­sid­er­ing cut­ting cov­er for Rus­sia and Ukraine, Reuters report­ed on Fri­day. read more

Munich Re was look­ing to bring in new word­ings on its direct cyber insur­ance prod­ucts, Rein­hart said. The rein­sur­er was also sug­gest­ing to its cyber insur­er clients that they intro­duce sim­i­lar claus­es.

Ambigu­ous busi­ness inter­rup­tion pol­i­cy word­ings led to a slew of court cas­es across the world in the past two years over whether or not the COVID-19 pan­dem­ic was cov­ered by insur­ance.

“We have learnt this les­son as an indus­try in respect of the pan­dem­ic — how painful it is if you have unclear word­ings,” said Rein­hart.

“Our inten­tion is to have very, very clear wordings...and avoid sur­pris­es.”

...

———-

“Munich Re tight­ens up cyber insur­ance poli­cies to exclude war” By Car­olyn Cohn and Noor Zainab Hus­sain; Reuters; 04/08/2022

“Most cyber poli­cies cov­er com­pa­nies against busi­ness inter­rup­tion loss­es and the repair of hacked net­works fol­low­ing a cyber attack, but exclude war. How­ev­er, grey areas in the word­ings leave insur­ers open to claims as a result of cyber war. read more”

The insur­ance indus­try is on guard: the war in Ukraine rep­re­sents a series of insur­ance night­mare sit­u­a­tions. Night­mare sit­u­a­tions root­ed in pol­i­cy ambi­gu­i­ty. It’s the kind of night­mare sit­u­a­tion the indus­try was already deal­ing with in the area of pan­dem­ic insur­ance. Is the indus­try liable for mas­sive pay­outs in rela­tion to dis­rup­tions cre­at­ed by the war in Ukraine? Or do the war exclu­sions to cyber­at­tack cov­er­age apply in this case? As we can see from the com­ments being issued by Munich Re’s chief under­writer, Juer­gen Rein­hart, Munich Re is encour­ag­ing the indus­try to all get on the same page. And yet it’s very unclear what that page should be. Accord­ing to Rein­hart, the inva­sion of Ukraine was not a “clas­sic cyber war”, but it’s not clear. Arriv­ing at some sort of clar­i­ty on the mat­ter soon­er rather than lat­er was an imme­di­ate imper­a­tive:

...
Munich Re is seek­ing clear­er war exclu­sion claus­es in cyber poli­cies, based on word­ing devel­oped last year in the Lloy­d’s of Lon­don mar­ket.

The inva­sion of Ukraine was not a “clas­sic cyber war,” said Juer­gen Rein­hart, chief under­writer, cyber, at Munich Re, but he said it was best to be pre­pared.

“Let’s not wait...but act now.”

...

Munich Re was look­ing to bring in new word­ings on its direct cyber insur­ance prod­ucts, Rein­hart said. The rein­sur­er was also sug­gest­ing to its cyber insur­er clients that they intro­duce sim­i­lar claus­es.

Ambigu­ous busi­ness inter­rup­tion pol­i­cy word­ings led to a slew of court cas­es across the world in the past two years over whether or not the COVID-19 pan­dem­ic was cov­ered by insur­ance.

“We have learnt this les­son as an indus­try in respect of the pan­dem­ic — how painful it is if you have unclear word­ings,” said Rein­hart.

“Our inten­tion is to have very, very clear wordings...and avoid sur­pris­es.”
...

That was the indus­try’s response to the con­flict in Ukraine and the risk of cyber­war back in April. Flash for­ward to the fol­low­ing arti­cle from mid-June, and we find that the indus­try is still strug­gling to arrive as a con­sen­sus. But there does appear to be a com­mon sen­ti­ment form­ing around one aspect of the indus­try’s response to a pos­si­ble large-scale cyber attack: the insur­ance indus­try is con­fi­dent that the insur­ance indus­try won’t be capa­ble of cov­er­ing such a wide-scale event and the gov­ern­ment should instead step in as a back­stop. Sur­prise:

Insur­ance Jour­nal

From Pan­dem­ic to Cyber War, Clear Pol­i­cy Word­ing Is Key for Insur­ers

By Eliz­a­beth Blos­field | June 15, 2022

Insur­ers and insureds alike agree that clear pol­i­cy word­ing will be the path for­ward in deal­ing with con­cerns about cyber war in the wake of the Rus­sia-Ukraine con­flict. This isn’t the first time in recent his­to­ry that rework­ing pol­i­cy lan­guage has been top-of-mind for the insur­ance indus­try, either.

“The pan­dem­ic has shown some ambi­gu­i­ties can exist in tra­di­tion­al pol­i­cy word­ings,” said Jür­gen Rein­hart, chief under­writer for Cyber at Munich Re. “All of this under­lines the impor­tance for insur­ers to have clear word­ings that are fit for pur­pose.”

The struc­ture of that pol­i­cy lan­guage, how­ev­er, is some­thing on which insur­ers and insureds have strug­gled to find com­mon ground.

These chal­lenges recent­ly came to light dur­ing the COVID-19 pan­dem­ic, which served as a wake-up call for the insur­ance indus­try in terms of how it approach­es cov­er for non-dam­age busi­ness inter­rup­tion (NDBI), wrote Alas­tair Speare-Cole, pres­i­dent and gen­er­al man­ag­er of insur­ance for QOMPLX, in an arti­cle for Car­ri­er Man­age­ment at the begin­ning of last year.

This is because fed­er­al and state mea­sures were enact­ed start­ing in March 2020 to reduce the spread of COVID-19, and with stay-at-home orders in place, many busi­ness­es sought com­pen­sa­tion from their insur­ers under their busi­ness inter­rup­tion poli­cies. RiskGe­nius CEO Chris Cheatham and MIT Researcher Bryan Wil­son wrote about this in a series of arti­cles for Car­ri­er Man­age­ment, inves­ti­gat­ing the link between stay-at-home orders and num­bers of busi­ness inter­rup­tion insur­ance cov­er­age law­suits by state.

The insur­ance indus­try has large­ly denied most of these claims, cit­ing virus-relat­ed exclu­sions, but this has led to an ongo­ing con­ver­sa­tion about unclear pol­i­cy lan­guage and even law­suits being filed against insur­ers. Now, the indus­try is fac­ing a sim­i­lar chal­lenge regard­ing the Rus­sia-Ukraine con­flict as the threat of cyber war looms.

“War is a prime exam­ple of a sys­temic risk that can­not be con­trolled and, there­fore, needs to be exclud­ed due to its ruinous poten­tial,” Rein­hart said. “Typ­i­cal­ly, war is exclud­ed in all major lines of busi­ness. This is true also for cyber insur­ance.”

Munich Re is one of sev­er­al insur­ers that has been rethink­ing cyber war exclu­sion­ary lan­guage on the back of what’s hap­pen­ing in Ukraine. Reuters report­ed in April that the insur­er is plan­ning new word­ings in cyber insur­ance poli­cies to exclude war and avoid dis­putes over what is cov­ered.

“Munich Re has been very active in forc­ing clear and effec­tive, more stan­dard­ized cyber war exclu­sions,” Rein­hart said. “This would be ben­e­fi­cial to all stake­hold­ers.”

AXIS Insur­ance is anoth­er insur­er that has been pay­ing close atten­tion to the recent rhetoric around cyber war exclu­sions. Pete Vogt, the company’s chief finan­cial offi­cer, said in its first-quar­ter 2022 earn­ings call that the com­pa­ny feels good about the war exclu­sion in its cyber poli­cies giv­en the cur­rent land­scape.

“We think it’s one of the best out there,” he said.

Dan True­man, the company’s head of glob­al cyber and tech­nol­o­gy, told Car­ri­er Man­age­ment that while war exclu­sions vary, AXIS is con­fi­dent that its own is “clear and effec­tive.”

“Inter­nal­ly and exter­nal­ly, we con­tin­ue to pri­or­i­tize ensur­ing clear under­stand­ing around the terms of our exclu­sions, be that relat­ing to war or infra­struc­ture exclu­sions, and the impor­tance of putting in place min­i­mum stan­dards across our book,” he said.

The Lloyd’s Mar­ket Asso­ci­a­tion has also been work­ing to clar­i­fy its pol­i­cy lan­guage around cyber war exclu­sions, recent­ly releas­ing four mod­el claus­es to exclude cov­er­age for acts of war from cyber insur­ance poli­cies.

“I mean, assess­ing risk sit­u­a­tions is our core busi­ness,” Lloyds Chief Finan­cial Offi­cer Burkhard Keese told Car­ri­er Man­age­ment in an April inter­view. “You need to do this in a real­ly struc­tured way. You need to ask what lines of busi­ness could be impact­ed by war.”

Pol­i­cy­hold­er Push­back

Sim­i­lar to what has played out dur­ing the pan­dem­ic, how­ev­er, insur­ers are once again fac­ing push­back from pol­i­cy­hold­ers regard­ing exclu­sion­ary lan­guage.

“When some­thing cat­a­stroph­ic is hap­pen­ing, that’s when you’re sup­posed to be cov­ered by your insur­ance, and then they come out and say, ‘Oh, well, we can’t pay for all this. It’s too expen­sive,’” said Peter Hal­prin, part­ner at law firm Pasich LLP. “So, what’s the point, right? It’s the same thing that pol­i­cy­hold­ers are say­ing with the pan­dem­ic. [They’re say­ing], ‘I thought I bought busi­ness inter­rup­tion cov­er­age. My busi­ness was inter­rupt­ed, and [the insur­ers are telling me] it’s not cov­ered.’”

Some have said this could fur­ther a lack of trust between insur­ers and pol­i­cy­hold­ers at a time when the indus­try is already strug­gling with rep­u­ta­tion­al risk.

“What we haven’t done well in COVID is that we haven’t shown enough lead­er­ship as Lloyd’s and as an indus­try,” Keese said. “There are sys­temic loss­es, but the BI [busi­ness inter­rup­tion] cas­es in the UK and in Aus­tralia were not entire­ly help­ful for our brand.”

...

The insur­ance indus­try, though, has remained firm that unprece­dent­ed dis­as­ters such as the COVID-19 pan­dem­ic and any poten­tial act of cyber war are sim­ply too big to insure.

“As was men­tioned in our most recent earn­ings call, war exclu­sions have been in place across our cyber book for a long time and are one of the key tools we use to man­age indi­vid­ual risk expo­sure and expo­sure to sys­temic risk,” True­man said.

Gov­ern­ment Back­stop

Jon Bate­man, a senior fel­low in the cyber pol­i­cy ini­tia­tive of the Tech­nol­o­gy and Inter­na­tion­al Affairs Pro­gram at the Carnegie Endow­ment for Inter­na­tion­al Peace, said on a recent episode of Insur­ance Journal’s Insur­ing Cyber Pod­cast that exclu­sions could be espe­cial­ly help­ful to the indus­try now as insur­ers are fac­ing an unprece­dent­ed lev­el of dis­rup­tion.

“This out­break of cyber war, if it does occur, is hap­pen­ing at the worst pos­si­ble moment in finan­cial terms for an indus­try that’s been pum­meled by ran­somware and more broad­ly by COVID and infla­tion and nat­ur­al dis­as­ters around the world,” he said. “At a time of hard­en­ing cyber insur­ance mar­kets, an out­break of cyber war is in some ways the worst night­mare for insur­ers and rein­sur­ers and could be a his­toric chal­lenge to the mar­ket­place.”

Rein­hart agreed, adding that risks relat­ed to war should instead be tak­en on by the pub­lic sec­tor.

“Giv­en that war is gen­er­al­ly con­sid­ered unin­sur­able, the risk needs to be retained by the econ­o­my,” he said.

Bate­man said that a gov­ern­ment back­stop is one solu­tion that could have pos­i­tive impli­ca­tions for the insur­ance indus­try. For pol­i­cy­hold­ers, gov­ern­ment back­stops can step in when insur­ance cov­er­age runs out dur­ing a cat­a­stroph­ic inci­dent, he said. Insur­ers strug­gling to find the line between insur­able and unin­sur­able inci­dents can ben­e­fit, too, he added, know­ing cov­er­age up to a cer­tain lim­it could be sup­port­ed by addi­tion­al cap­i­tal in the mar­ket­place.

“I see it as a poten­tial win-win,” he said, not­ing that the gov­ern­ment like­ly would step in to assist in the face of a tru­ly cat­a­stroph­ic inci­dent of cyber war any­way.

“If we see a true cyber cat­a­stro­phe on the order of a hun­dred bil­lion or more loss­es or insured loss­es in one coun­try, the gov­ern­ment is going to step in, regard­less of whether there’s any scheme in place in advance,” he said. “We’ve seen this with Hur­ri­cane Kat­ri­na, with wild­fires. If there’s a huge cat­a­stro­phe that dev­as­tates a local­i­ty or a broad sec­tor of soci­ety, the Con­gress or anoth­er leg­is­la­ture will just need to come in and have some kind of emer­gency assis­tance. COVID is anoth­er exam­ple of that.”

Lack of Uni­for­mi­ty

Although the insur­ance indus­try can draw sim­i­lar­i­ties between the threat of cyber war and pan­dem­ic-relat­ed chal­lenges, there are some key dif­fer­ences. Insur­ance Ser­vices Office forms pro­vid­ing a tem­plate for virus exclu­sions added some clar­i­ty for COVID-relat­ed busi­ness inter­rup­tion claims, but one big prob­lem in the case of cyber war is a lack of uni­for­mi­ty.

“There is no ISO form,” Hal­prin said. “You’re see­ing tremen­dous vari­a­tions in lan­guage. I think it makes it hard for the indus­try as a whole to kind of wrap its arms around this issue and say, ‘Here is our defin­i­tive war exclu­sion that we’re all going to use.’”

What’s more, Bate­man said affir­ma­tive or stand­alone cyber insur­ers have dif­fer­ent incen­tives for enforc­ing their exclu­sions than property/casualty insur­ers or those fac­ing silent cyber cov­er­age.

“Ambigu­ous pol­i­cy lan­guage can also result in legal actions,” said Ger­ry Glom­bic­ki, senior direc­tor in Fitch’s U.S. insur­ance group.

Bate­man added this cre­ates a whole new set of chal­lenges as dif­fer­ent juris­dic­tions will have dif­fer­ent prece­dents for set­tling these actions. That said, Glom­bic­ki main­tained most pol­i­cy word­ings will be clear enough to exclude a for­mal dec­la­ra­tion of war.

“Pol­i­cy word­ing can dif­fer across poli­cies and insureds, but gen­er­al­ly speak­ing, a for­mal dec­la­ra­tion of war is like­ly to trig­ger the war exclu­sion that is present in most insur­ance poli­cies,” he said.

Ambigu­ous Attri­bu­tion

Per­haps just as big of a chal­lenge as unclear pol­i­cy lan­guage is a lack of clar­i­ty around how cyber attacks are attrib­uted, experts said.

“It’s a fine line between state-spon­sored and just rogue attacks,” Roje said. “It’s just hard to tell, and I think that’s real­ly the key issue.”

Regard­ing the sit­u­a­tion in Ukraine, this means it can be dif­fi­cult to deter­mine where cyber loss­es are stem­ming from, Keese said. “Were they com­ing from war or polit­i­cal vio­lence?” he said. “War is exclud­ed. Polit­i­cal vio­lence is not exclud­ed. There­fore, you need to go through the thou­sands of [poli­cies] you have and real­ly assess where is the expo­sure and are loss­es report­ed.”

Even the term “cyber war” itself brings ambi­gu­i­ty, accord­ing to Bate­man.

“‘Cyber war’ is one of those com­mon­place terms that is bandied around a lot by casu­al news cov­er­age or even pro­fes­sion­als, but it real­ly lacks a clear def­i­n­i­tion,” he said. The term “cyber war” can mean one of two things, Bate­man explained. It could serve to define a nation-state attack in which one gov­ern­ment hacks into anoth­er coun­try in a way that is so dam­ag­ing it is con­sid­ered an act of war, or it could mean two coun­tries are at war in a phys­i­cal sense and cyber oper­a­tions become a part of that war, sim­i­lar to what’s hap­pen­ing now with Rus­sia and Ukraine.

“It’s very hard in this envi­ron­ment to attribute events or vet the claims that are being made pub­licly, and it’s easy to jump to con­clu­sions if there is some kind of cyber dis­rup­tion that it must have some­thing to do with the con­flict in Ukraine,” he said. “So, the term ‘cyber war’ is very vague and unclear, and the real­i­ty of cyber war is very vague and unclear as well.”

Once again, this chal­lenge could like­ly fall on the courts, Glom­bic­ki said, which presents its own set of dif­fi­cul­ties. “One of the main chal­lenges in a cyber attack is attri­bu­tion of the attack,” he said. “Absent a cred­i­ble admis­sion by a sov­er­eign nation, attri­bu­tion would be left to the courts to decide, which is his­tor­i­cal­ly dif­fi­cult.”

Like­li­hood of Cyber War

Despite talk about the height­ened risk of cyber war giv­en the con­flict in Ukraine, what is the like­li­hood that it could actu­al­ly hap­pen?

The answer is, again, unclear.

“As is always the case in insur­ance, it would def­i­nite­ly depend on a num­ber of spe­cif­ic fac­tors,” Bate­man said. “So, we have to admit that no one real­ly knows the exact­ly like­li­hood.”

That said, Bate­man said he believes the risk is great­ly height­ened right now.

“U.S. gov­ern­ment has said in most of these warn­ings that there is no spe­cif­ic cred­i­ble threat at this time against the Unit­ed States, but that just means that we don’t have spe­cif­ic intel­li­gence warn­ing,” he said. “I per­son­al­ly believe that the threat of cyber attacks against U.S. infra­struc­ture and oth­er large-scale cyber dis­rup­tions in the Unit­ed States is great­ly, great­ly ele­vat­ed right now—maybe the high­est that it’s been in his­to­ry, actu­al­ly.”

Jake Olcott, vice pres­i­dent of gov­ern­ment affairs at cyber­se­cu­ri­ty rat­ings com­pa­ny Bit­Sight, said this means com­pa­nies, includ­ing insur­ers, need to rec­og­nize that cyber risk is real even for com­pa­nies that aren’t intend­ed tar­gets.

“In the past, a com­pa­ny or an orga­ni­za­tion would say, ‘Well, it wasn’t an attack tar­get­ing me and, there­fore, I was able to avoid dam­age or harm,” he said. “In the last five years, we’ve real­ly real­ized just how inte­gral the sup­ply chain actu­al­ly is to our own abil­i­ty to do busi­ness. At this point, every attack—even an unin­tend­ed attack on an organization—should be con­sid­ered a direct impact if it affects our sup­ply chain.”

Glom­bic­ki said that for insur­ers seek­ing to mit­i­gate cyber risk, stand­alone cyber is more trans­par­ent than pack­aged cyber polices and that dis­ci­plined under­writ­ing is imper­a­tive.

“Dis­ci­plined under­writ­ers have a long-term advan­tage over car­ri­ers that have naïve capac­i­ty or a short-term focus,” he added.

One pos­i­tive devel­op­ment Olcott has observed as the cyber insur­ance indus­try has matured is that car­ri­ers are start­ing to learn how to mod­el cyber risks and gath­er data to under­stand how these could affect their port­fo­lio.

“I think that data and ana­lyt­ics are increas­ing­ly play­ing a very impor­tant role in bring­ing aware­ness,” he said. “I think that there’s a lot more to do in this space, but I think data and ana­lyt­ics are increas­ing­ly dri­ving that con­ver­sa­tion for­ward.”

How­ev­er, as is always the case in cyber, the risks remain ever­chang­ing no mat­ter how much prepa­ra­tion is done. “I’ve been work­ing in cyber­se­cu­ri­ty for more than 15 years,” he said, “and the thing that you always thought was going to happen,…it doesn’t quite hap­pen like that.”

With this in mind, he said the most impor­tant thing for insur­ers to do is to be ready to respond quick­ly when an inci­dent hap­pens by under­stand­ing the risk areas with­in their own soft­ware and third-par­ty ven­dors, as well as col­lab­o­rat­ing with insureds to iden­ti­fy prob­lem areas.

“One of the prob­lems that insur­ers have is that you can kind of stim­u­late the risk, but nobody’s 100 per­cent cer­tain about where the next risk is com­ing from,” he said. “That is increas­ing­ly becom­ing the name of the game in cyber­se­cu­ri­ty. There’s always going to be anoth­er Solar­Winds, anoth­er Microsoft Exchange, anoth­er Log4J. These inci­dents will per­sist, like­ly for eter­ni­ty, but the abil­i­ty to build a secu­ri­ty pro­gram that can rapid­ly iden­ti­fy and respond to these things is going to be the dif­fer­ence between expe­ri­enc­ing a sig­nif­i­cant mate­r­i­al inci­dent and not.”

————

“From Pan­dem­ic to Cyber War, Clear Pol­i­cy Word­ing Is Key for Insur­ers” by Eliz­a­beth Blos­field; Insur­ance Jour­nal; 06/15/2022

“Munich Re is one of sev­er­al insur­ers that has been rethink­ing cyber war exclu­sion­ary lan­guage on the back of what’s hap­pen­ing in Ukraine. Reuters report­ed in April that the insur­er is plan­ning new word­ings in cyber insur­ance poli­cies to exclude war and avoid dis­putes over what is cov­ered.”

Pol­i­cy ambi­gu­i­ty is indeed prob­lem­at­ic for the insur­ance indus­try but Munich Re is con­tin­ue to push the indus­try towards a sim­ple solu­tion: just pre­emp­tive­ly declare any cyber attacks emerg­ing out of the con­flict in Ukraine to not be cov­ered by exist­ing cyber attack poli­cies. A move that would pre­sum­ably be much sim­pler to do from a legal ambi­gu­i­ty stand­point if the entire indus­try does it simul­ta­ne­ous­ly. That’ how the insur­ance indus­try is plan­ning on deal­ing with the pos­si­bil­i­ty of major econ­o­my-dis­rupt­ing cyber-attacks erupt­ing from the war in Ukraine. Pre­emp­tive­ly absolv­ing itself of any lia­bil­i­ties:

...
“The pan­dem­ic has shown some ambi­gu­i­ties can exist in tra­di­tion­al pol­i­cy word­ings,” said Jür­gen Rein­hart, chief under­writer for Cyber at Munich Re. “All of this under­lines the impor­tance for insur­ers to have clear word­ings that are fit for pur­pose.”

The struc­ture of that pol­i­cy lan­guage, how­ev­er, is some­thing on which insur­ers and insureds have strug­gled to find com­mon ground.

These chal­lenges recent­ly came to light dur­ing the COVID-19 pan­dem­ic, which served as a wake-up call for the insur­ance indus­try in terms of how it approach­es cov­er for non-dam­age busi­ness inter­rup­tion (NDBI), wrote Alas­tair Speare-Cole, pres­i­dent and gen­er­al man­ag­er of insur­ance for QOMPLX, in an arti­cle for Car­ri­er Man­age­ment at the begin­ning of last year.

This is because fed­er­al and state mea­sures were enact­ed start­ing in March 2020 to reduce the spread of COVID-19, and with stay-at-home orders in place, many busi­ness­es sought com­pen­sa­tion from their insur­ers under their busi­ness inter­rup­tion poli­cies. RiskGe­nius CEO Chris Cheatham and MIT Researcher Bryan Wil­son wrote about this in a series of arti­cles for Car­ri­er Man­age­ment, inves­ti­gat­ing the link between stay-at-home orders and num­bers of busi­ness inter­rup­tion insur­ance cov­er­age law­suits by state.

The insur­ance indus­try has large­ly denied most of these claims, cit­ing virus-relat­ed exclu­sions, but this has led to an ongo­ing con­ver­sa­tion about unclear pol­i­cy lan­guage and even law­suits being filed against insur­ers. Now, the indus­try is fac­ing a sim­i­lar chal­lenge regard­ing the Rus­sia-Ukraine con­flict as the threat of cyber war looms.

“War is a prime exam­ple of a sys­temic risk that can­not be con­trolled and, there­fore, needs to be exclud­ed due to its ruinous poten­tial,” Rein­hart said. “Typ­i­cal­ly, war is exclud­ed in all major lines of busi­ness. This is true also for cyber insur­ance.”

...

“Munich Re has been very active in forc­ing clear and effec­tive, more stan­dard­ized cyber war exclu­sions,” Rein­hart said. “This would be ben­e­fi­cial to all stake­hold­ers.”
...

Also note the omi­nous implic­it warn­ing in all this: the risk of a large-scale cyber-attack is seen as great­ly ele­vate right now. Which is obvi­ous­ly true fol­low­ing the Solar­Winds and Microsoft Exchange mega-hacks of 2020–21. That’s part of the con­text of these warn­ings com­ing out of the indus­try: the glob­al econ­o­my was already in a high­ly pre­car­i­ous posi­tion regard­ing the risk of econ­o­my-crip­pling mega-hacks long before the inva­sion of Ukraine ever hap­pened:

...
Despite talk about the height­ened risk of cyber war giv­en the con­flict in Ukraine, what is the like­li­hood that it could actu­al­ly hap­pen?

The answer is, again, unclear.

“As is always the case in insur­ance, it would def­i­nite­ly depend on a num­ber of spe­cif­ic fac­tors,” Bate­man said. “So, we have to admit that no one real­ly knows the exact­ly like­li­hood.”

That said, Bate­man said he believes the risk is great­ly height­ened right now.

“U.S. gov­ern­ment has said in most of these warn­ings that there is no spe­cif­ic cred­i­ble threat at this time against the Unit­ed States, but that just means that we don’t have spe­cif­ic intel­li­gence warn­ing,” he said. “I per­son­al­ly believe that the threat of cyber attacks against U.S. infra­struc­ture and oth­er large-scale cyber dis­rup­tions in the Unit­ed States is great­ly, great­ly ele­vat­ed right now—maybe the high­est that it’s been in his­to­ry, actu­al­ly.”

Jake Olcott, vice pres­i­dent of gov­ern­ment affairs at cyber­se­cu­ri­ty rat­ings com­pa­ny Bit­Sight, said this means com­pa­nies, includ­ing insur­ers, need to rec­og­nize that cyber risk is real even for com­pa­nies that aren’t intend­ed tar­gets.

“In the past, a com­pa­ny or an orga­ni­za­tion would say, ‘Well, it wasn’t an attack tar­get­ing me and, there­fore, I was able to avoid dam­age or harm,” he said. “In the last five years, we’ve real­ly real­ized just how inte­gral the sup­ply chain actu­al­ly is to our own abil­i­ty to do busi­ness. At this point, every attack—even an unin­tend­ed attack on an organization—should be con­sid­ered a direct impact if it affects our sup­ply chain.”
...

And that loom­ing ongo­ing glob­al risk asso­ci­at­ed with those mega-hacks also under­scores one of the oth­er major com­pli­ca­tions fac­ing the insur­ance indus­try’s attempt to pro­vide cov­er­age for cyber-attacks: attri­bu­tion. As we’ve seen, it’s effec­tive­ly impos­si­ble to arriv­ing at a legal­ly-con­clu­sive attri­bu­tion for who is respon­si­ble for many of the most sophis­ti­cat­ed and dev­as­tat­ing cyber attacks. It’s guess work, at best. So if con­clu­sive attri­bu­tion is required for these cyber pro­tec­tion poli­cies to pay out, that could cre­ate an enor­mous headache regard­ing the the pro­pa­gan­dis­tic uses of cyber­at­tacks and mak­ing unground­ed attri­bu­tion asser­tions. In oth­er words, West­ern gov­ern­ments’ nar­ra­tives about how all cyber­at­tacks come from Rus­sia and Chi­na will be a lot hard­er to main­tain when those asser­tions get chal­lenged by insur­ers in court demand­ing proof before they pay out:

..
Per­haps just as big of a chal­lenge as unclear pol­i­cy lan­guage is a lack of clar­i­ty around how cyber attacks are attrib­uted, experts said.

“It’s a fine line between state-spon­sored and just rogue attacks,” Roje said. “It’s just hard to tell, and I think that’s real­ly the key issue.”

Regard­ing the sit­u­a­tion in Ukraine, this means it can be dif­fi­cult to deter­mine where cyber loss­es are stem­ming from, Keese said. “Were they com­ing from war or polit­i­cal vio­lence?” he said. “War is exclud­ed. Polit­i­cal vio­lence is not exclud­ed. There­fore, you need to go through the thou­sands of [poli­cies] you have and real­ly assess where is the expo­sure and are loss­es report­ed.”

Even the term “cyber war” itself brings ambi­gu­i­ty, accord­ing to Bate­man.

“‘Cyber war’ is one of those com­mon­place terms that is bandied around a lot by casu­al news cov­er­age or even pro­fes­sion­als, but it real­ly lacks a clear def­i­n­i­tion,” he said. The term “cyber war” can mean one of two things, Bate­man explained. It could serve to define a nation-state attack in which one gov­ern­ment hacks into anoth­er coun­try in a way that is so dam­ag­ing it is con­sid­ered an act of war, or it could mean two coun­tries are at war in a phys­i­cal sense and cyber oper­a­tions become a part of that war, sim­i­lar to what’s hap­pen­ing now with Rus­sia and Ukraine.

“It’s very hard in this envi­ron­ment to attribute events or vet the claims that are being made pub­licly, and it’s easy to jump to con­clu­sions if there is some kind of cyber dis­rup­tion that it must have some­thing to do with the con­flict in Ukraine,” he said. “So, the term ‘cyber war’ is very vague and unclear, and the real­i­ty of cyber war is very vague and unclear as well.”

Once again, this chal­lenge could like­ly fall on the courts, Glom­bic­ki said, which presents its own set of dif­fi­cul­ties. “One of the main chal­lenges in a cyber attack is attri­bu­tion of the attack,” he said. “Absent a cred­i­ble admis­sion by a sov­er­eign nation, attri­bu­tion would be left to the courts to decide, which is his­tor­i­cal­ly dif­fi­cult.”
...

This is also a good time to recall Munich Re’s work­ing rela­tion­ship with the CIA’s In-Q-Tel ven­ture cap­i­tal firm in the devel­op­ment of pan­dem­ic insur­ance mar­kets in part­ner­ship with Metabio­ta. It’s the kind of fun fact that sug­gests Munich Re is prob­a­bly con­sult­ing with the intel­li­gence com­mu­ni­ty in help­ing to wran­gle the insur­ance indus­try into devel­op­ing a com­mon cyber­pol­i­cy frame­work. And that brings us to Munich Re’s pro­posed solu­tion for how the insur­ance indus­try should han­dle a major cyber-attack: have the gov­ern­ment serve as a back stop:

...
Jon Bate­man, a senior fel­low in the cyber pol­i­cy ini­tia­tive of the Tech­nol­o­gy and Inter­na­tion­al Affairs Pro­gram at the Carnegie Endow­ment for Inter­na­tion­al Peace, said on a recent episode of Insur­ance Journal’s Insur­ing Cyber Pod­cast that exclu­sions could be espe­cial­ly help­ful to the indus­try now as insur­ers are fac­ing an unprece­dent­ed lev­el of dis­rup­tion.

“This out­break of cyber war, if it does occur, is hap­pen­ing at the worst pos­si­ble moment in finan­cial terms for an indus­try that’s been pum­meled by ran­somware and more broad­ly by COVID and infla­tion and nat­ur­al dis­as­ters around the world,” he said. “At a time of hard­en­ing cyber insur­ance mar­kets, an out­break of cyber war is in some ways the worst night­mare for insur­ers and rein­sur­ers and could be a his­toric chal­lenge to the mar­ket­place.”

Rein­hart agreed, adding that risks relat­ed to war should instead be tak­en on by the pub­lic sec­tor.

“Giv­en that war is gen­er­al­ly con­sid­ered unin­sur­able, the risk needs to be retained by the econ­o­my,” he said.

Bate­man said that a gov­ern­ment back­stop is one solu­tion that could have pos­i­tive impli­ca­tions for the insur­ance indus­try. For pol­i­cy­hold­ers, gov­ern­ment back­stops can step in when insur­ance cov­er­age runs out dur­ing a cat­a­stroph­ic inci­dent, he said. Insur­ers strug­gling to find the line between insur­able and unin­sur­able inci­dents can ben­e­fit, too, he added, know­ing cov­er­age up to a cer­tain lim­it could be sup­port­ed by addi­tion­al cap­i­tal in the mar­ket­place.

“I see it as a poten­tial win-win,” he said, not­ing that the gov­ern­ment like­ly would step in to assist in the face of a tru­ly cat­a­stroph­ic inci­dent of cyber war any­way.

“If we see a true cyber cat­a­stro­phe on the order of a hun­dred bil­lion or more loss­es or insured loss­es in one coun­try, the gov­ern­ment is going to step in, regard­less of whether there’s any scheme in place in advance,” he said. “We’ve seen this with Hur­ri­cane Kat­ri­na, with wild­fires. If there’s a huge cat­a­stro­phe that dev­as­tates a local­i­ty or a broad sec­tor of soci­ety, the Con­gress or anoth­er leg­is­la­ture will just need to come in and have some kind of emer­gency assis­tance. COVID is anoth­er exam­ple of that.”

...

Keep in mind one of the oth­er major advan­tages to hav­ing the gov­ern­ment serve as the ulti­mate back stop for a major econ­o­my-wide cyber event: it like­ly lifts the legal need to con­clu­sive attribute the hack to a par­tic­u­lar gov­ern­ment or enti­ty. In oth­er words, any con­ve­nient nar­ra­tives about who is respon­si­ble for the attack can be main­tained with­out being seri­ous­ly chal­lenged by a tech­ni­cal inves­ti­ga­tion in the courts.

So as we can see, com­pa­nies with cyber-insur­ance cov­er­age might want to check the fine print on their poli­cies. Because it sounds like the insur­ance indus­try is plan­ning on a major cyber event it’s expect­ing soon­er rather than lat­er. Specif­i­cal­ly, a major cyber event that it’s plan­ning on not pay­ing out on.