There is an unmet need for greater investment in preparedness against major epidemics and pandemics. The arguments in favour of such investment have been largely based on estimates of the losses in national incomes that might occur as the result of a major epidemic or pandemic. Recently, we extended the estimate to include the valuation of the lives lost as a result of pandemic-related increases in mortality. This produced markedly higher estimates of the full value of loss that might occur as the result of a future pandemic. We parametrized an exceedance probability function for a global influenza pandemic and estimated that the expected number of influenza-pandemic-related deaths is about 720 000 per year. We calculated that the expected annual losses from pandemic risk to be about 500 billion United States dollars - or 0.6% of global income - per year. This estimate falls within - but towards the lower end of - the Intergovernmental Panel on Climate Change's estimates of the value of the losses from global warming, which range from 0.2% to 2% of global income. The estimated percentage of annual national income represented by the expected value of losses varied by country income grouping: from a little over 0.3% in high-income countries to 1.6% in lower-middle-income countries. Most of the losses from influenza pandemics come from rare, severe events.