While reading about an attempt to develop and market pandemic insurance to businesses and reinsurance companies, I was introduced to a term that has a substantial effect on both coverage and cost—“sentiment index.” In addition to the actual product, the sentiment index factors into sales.
In its most basic form, the sentiment in question is: fear. The greater the fear of a pandemic, the narrower the policy can be written, and the greater the price can be set. The greater the fear, the more receptive will be the client.
I am first struck by the euphemism of “sentiment” to mask the particular of “fear.” Upon first hearing of sentiment, the song popularized by Doris Day came to my ear—Sentimental Journey. This sentiment was a yearning for home after being astray or away for a while. Sentiment leans toward a mushy, romanticized, nostalgic sentimentality—an emotional idealism.
Fear carries a sharpness that is hidden by a soft sentiment—the result: advantage insurer.
It turned out that a 500-year event is eminently dismissible. There is little fear that will lead to an investment in protection from some distant possibility when the immediate fear regards a next quarter’s bottom line.
Because insurers need information, they were quick to note the Wuhan spike in pulmonary distress and pulled the offer of pandemic insurance. At that point, there were no monies built up through premiums to use for any payout. You can read about this at https://www.wired.com/story/nathan-wolfe-global-economic-fallout-pandemic-insurance/.
At question is what sentiment is behind my decision-making. And yours?