About Bill Coffin

Bill Coffin is the former publisher of Risk Management magazine.
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What’s in a Name?

As we begin the week, the influenza outbreak continues to gather steam. According to the World Health Organization (WHO), 20 countries have officially reported close to 1,000 cases of A (H1N1) influenza infection.

Of these a little more than half are in Mexico, where 25 people have died from the disease. According to the BBC, more than 200 cases have been confirmed among 30 U.S. states, with more expected in the coming days. The disease remains at a level 5 WHO alert, one step below pandemic status.

With news like this, it’s easy to over-react. But it pays to keep some things – like the disease’s relatively low death rate thus far – in perspective.

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After all, this disease has also caused a fair amount of collateral damage. While the WHO does not encourage full-bore border closings or national travel restrictions as a reaction to the outbreak, it does suggest that people who are already ill should delay international travel.

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Likewise, groups such as RIMS have suggested restricting nonessential travel, and numerous airlines have reduced flights and have gone to using smaller planes.

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Mexico has been particularly hard hit by all of this, as would be any nation that relies on tourism income to any appreciable degree. Toronto certainly learned that the hard way during its experience with SARS.

Perhaps the most dramatic, and most unnecessary, reaction to the outbreak thus far has been the nationwide swine cull in Egypt, which illustrated just how hard the pork industry has been hit by this, and by extension, the secondary businesses (e.g., restaurants, grocery stores) it deals with.  Last week, the WHO advised against referring to the outbreak any further as “swine flu,” since it raised inaccurate notions over the safety of pork products. The European Union has done likewise.

This blog will also do the same, referring to the disease henceforth by its proper name, influenza A (H1N1). This denotes that the current influenza outbreak is a type-A H1N1 virus. To prevent further confusion, this blog has also edited past posts to change the name of the disease where necessary.

P is for Pandemic

In the last few years, plenty of publications, including Risk Management (whose blog this is), have spent no small amount of energy discussing pandemic risk. The spectre of H5N1, the lethal strain of avian flu you’ve heard so much about, has predominated, but other ailments, such as SARS, which shut down the city of Toronto a few years ago but caused few actual deaths, also figure prominently on the mass-disease radar.

The truth is, today’s globalized economy, with rapid and ubiquitous international travel, as well as intense urban development and massive interaction between human and animals all makes the planet one giant incubator for the kind of pandemic that can a) spread quickly and easily between human and animal hosts, b) prove fatal or at least seriosly debilitating, and c) can affect a huge number of people over an international or intercontinental level.

Now, this story got old after SARS didn’t pan out and bird flu never ended the world. Ominously, the same thing happened with terrorism and hurricane risk. Security experts pointed out just how effective it would be to fly airliners into skyscrapers well in advance of 9/11, and yet it was not enough to prevent it from happening. Likewise, when Hurricane Charlie nearly leveled New Orleans, the United States was given its final wake-up call to the increasing severity to coastal risk (especially to that particular city). The next year, Katrina. And we all know how that sad story ended.

So we find ourselves talking about pandemic risk again while Mexico City has shut down due to a large and sudden A (H1N1) outbreak that has already killed at least 20 (whoops! make that 68 – CNN just confirmed it), sickened 1,000 more, and might very well have the needed ingredients to become the big pandemic the World Health Organization has been trying to warn us for a long while. Already, this flu outbreak appears to have elements of human, swine and avian flu, and if people are just learning about it when they are getting sick from it, then it might already have gotten out of the barn, so to speak.

When we covered avian flu back in 2006, we did it from a disaster management angle, focusing on things like having proper workers compensation coverage, having contingency plans for dealing with an empty office, and having remote working policies in place so folks could keep operations going under quarantine conditions. We hoped it was the sort of story we’d cover because we had to just to be thorough, and that nobody would ever actually need it. If Mexico City is a sign of things to come, however, it might be required reading. And as much as we like folks to get a lot out of our book, we don’t like it that much.

Keep your eyes peeled on this blog for updates; we’ll likely be coming back to it soon. A (H1N1) doesn’t look like an instant death sentence — most flus are not, and confirmed cases in New York City means the recent flu I just fought through may have been the same one in Mexico City. But Mexico City is shut down because of this, and there are a bunch of dead and sick people from it; even if it stays at just that level the sickness will have wrought havoc on one of the world’s largest cities. That, my friends, should be enough pandemic risk for anyone’s measuring stick. This is real. The question is, how much more real will it get? And how much will this spur people to take pandemic risk seriously while it still can be considered pre-emptive action? Sadly, not enough, I’ll wager. But time will tell. I hope to be proven wrong.

UPDATE: Many countries are now taking measures to prevent the flu from spreading within their borders.

Officials around the world on Sunday raced to contain an outbreak of A (H1N1) as potential new cases were reported from New Zealand to Hong Kong to Spain, raising concerns about the potential for a global pandemic.

Governments issued travel advisories urging people not to travel to Mexico, the apparent origin of the outbreak, where 81 people have died and some 1,300 have been infected. China, Russia and others set up quarantines for anyone possibly infected. Some countries banned pork imports from Mexico, even though there is no link between food products and the flu, and others were screening air travelers for signs of the disease.

UPDATE II: After the first case of A (H1N1) reported in Europe (Spain, specifically), the EU health czar is urging Europeans to stay out of Mexico and the United States.

Hoping to head off a global pandemic of swine flu that has surfaced in North America, the European Union’s health commissioner on Monday urged Europeans to avoid traveling to the United States or Mexico if doing so is not essential.

The warning came as health officials in Spain confirmed early Monday that a man hospitalized in eastern Spain had tested positive for A (H1N1), becoming what appeared to be Europe’s first case of the disease. Health authorities were also testing 17 other suspected cases across Spain, a major hub for travel between Mexico and Europe.

Britain and other European Union nations had already issued travel advisories for those traveling to Mexico, but the European Union’s health commissioner went a step further on Monday in urging Europeans to avoid nonessential trips. Europeans, she told reporters in Luxembourg, “should avoid traveling to Mexico or the United States of America unless it is very urgent for them.”

An Unfortunate Cancellation

With so much ink having been spilled over AIG in recent weeks, it seemed a particularly forward-thinking move for AIU to host a session today entitled “Evaluating Carrier Security Through Financial Crisis.

” After all, the insurance wing of AIG is not the part of the company that caused all of the trouble with credit default swaps. It’s still a world leader in insurance, and it is a firm with an enormous amount of strength behind it. It’s almost unfair that such a well-run operation should suffer any stigma attached to its parent, and for things it had nothing to do with, but unfair things happen all the time.

Especially in the world of insurance.

Unfortunately, when I went to the session, I found that it had been cancelled. Exactly why it was canceled is something I don’t know and honestly, I don’t much care to. After all, AIU has a long-standing relationship with RIMS and with this Conference, and there could be any number of reasons why the session did not come together. That’s not the point.

This session would have been a great opportunity for AIU to talk frankly to those who want to know if their insurance partners are really going to be there for them when they are needed. I suspect the event would have attracted a fair bit of trade media attraction, which is always reason for any firm to get a little nervous. But that aside, AIU has a lot of information and insight to share.

It’s too bad they could do that with us today. Another time, perhaps.

The Green Challenge

Environmental awareness is something a number of the insurance industry’s major carriers and brokers have spent a lot of energy promoting, and with good cause, too. According to one broker I spoke with this afternoon, companies are finally seeing the immediate results of going green, in terms of lower operating costs and much-improved records on health and safety.

One area where this all really comes together is that of reconstruction. On any given year, insurers and their clients must work together to rebuild plenty of buildings that have suffered serious damage of some kind. With a strong environmental focus, the insurance partner can play a key role in making sure the rebuilding is also a re-greening, removing old asbestos, ensuring the new construction is more energy efficient, and so on.

This is a win-win for the insured and the insurer. The insured gets a much more cost-effective building, and the insurer wins because even if the rebuilding costs are a little higher than they would otherwise be, the re-greened building can provide a lower-risk environment on a number of environmental, safety and health fronts.

There are other areas, too, where the industry has staked its environmental claim, such as raising awareness on climate change and the subsequent risk that poses to coastal development. However, the industry still has a long way to go when it comes to presenting all of its ideas on using environmentalism as a competitive benefit with a single voice.

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The truth is, many insurers are still figuring out how much of the science they buy into, how much they want to sell to their clients, and how many of those clients really are in the market for it. It’s one thing to see a million people buy tickets to watch An Inconvenient Truth. It’s another to get a million insurance professionals to all agree with it.

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Still, it’s not all bad.

As scattered as the industry’s views on environmentalism may be, the breadth of buy-in is really encouraging to anybody who wants to see the business world embrace environmentalism more meaningfully.

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And as environmental awareness becomes more mainstream everyday, perhaps the baseline awareness of lowering energy consumption, reducing waste and pollution, and shrinking carbon footprints may make a grand, united voice from insurers unnecessary after all. Perhaps, how each insurer views green business will be nothing more than one more characteristic to sell as one their own competitive strengths.

I think we could live with that.