Risk managers’ response to risk of influenza pandemic

The outbreak of avian flu cases (H5N1 virus) in Turkey highlights the importance to business of good preparation against the potential risks of a widespread epidemic, including travel precautions and revisions to business continuity plans, says Marie-Gemma Dequae, the President of the Federation of European Risk Management Associations (FERMA).”

“A massive outbreak of avian flu will not only affect the health of employees and their families, but also businesses. Through loss of production and sales, added value in our companies could be destroyed,” she comments. “Risk management measures have to be taken.”

Ms Dequae says:

• This has to start with getting grip on real facts and figures and extending travel guidelines and precautions in countries at risk. 
• Companies have to gather information on the development of vaccines and establish procedures for early detection of illness.
• They must follow closely the reaction of international government bodies, like the World Health Organization (WHO) and the plan issued by the European Commission.
• It is also important for companies to optimise their preparedness by revising their business continuity responses and establishing good communication channels.

FERMA Member Survey
An informal survey among members of FERMA revealed concern about the risk of an international influenza epidemic among European businesses, but differing perception of the severity of the risk and urgency of the need for additional risk management measures depending on type of business.
Risk managers or risk management associations from Denmark, France, Germany, Spain and the United Kingdom responded to questions from FERMA about how a flu pandemic could affect their business and what measures they are taking to manage the risk. Their responses showed that most sensitive sectors are health services, transport, telecoms and power suppliers and the food industry.

In most countries the activity is taking place at government and individual enterprise level. However, the French and British risk management associations, AMRAE and AIRMIC respectively, are playing an active role in supporting their members.

AMRAE is creating an information network for its members and hopes to open a dedicated, members only section of its website for the exchange of information. AIRMIC is working with the UK’s two other risk management bodies and the Business Continuity Institute (BCI) in a risk federation to consider the situation.

The most common areas of concern mentioned in the FERMA survey are:

• Travel restrictions
• The effect on suppliers in other countries.
• Some companies also believe there could be an impact on their ability to fulfil contracts, and companies selling goods and services to consumers can foresee a risk of reduced demand.
• One company with interests in bio combustibles said it is somewhat concerned about the potential effect on the agricultural sector.
• One association drew attention to the pension implications if there is high mortality.
• A small number of businesses may find demand for their products or services increases. One company with IT operations said a major outbreak of flu might result in an increased call on its software management services for medical services and hospitals.

The most frequently mentioned risk management measures are:

• Offering vaccination and anti-viral medication to employees. That this offer will not necessarily extend to employees’ families raises an issue, because supplies are likely to be inadequate to cover everyone. The French working group has found that employees would not take the anti-viral medication themselves but save it for their families.
• Offsite, tele-working and use of new forms of communicating, such as webinairs
• The creation of employee information and advice services

Where risk managers are not directly involved, it may be because responsibilities for managing the risks associated with widespread illness lie with other departments, such as human resources and health and safety. This is generally the case in countries such as Germany, where many of the national risk management association members are insurance specialists.

Cases
1. A multi national food manufacturer
said, “As we have facilities in Asia, for the last three years we have constantly updated guidelines, first for SARS and then avian flu. Basically, our plans include:

“Some travel restrictions in countries where there is a true crisis. Travel would only be permitted in critical situations and then with the full agreement of the traveller and subject to a specific authorisation process.

Some precautions for countries ‘at risk’ include:

• Advice to travellers returning from these areas about symptoms and action to take if they suspect they are ill.
• Advice to have normal flu vaccine
• Information for employees through intranet and internet links to external websites dealing with the outbreak.”

2. A European airline
The risk manager says, “An airline is a somewhat different animal to the rest of industrial companies. As we have about 16,000 crew flitting all over the globe every day, out medical staff are well prepared for endemic, epidemic, pandemic cases. Consequently, they inform all entities of the group, daily, if needed. They are, of course, in regular contact with their respective colleagues in other large airlines and the World Health Organization (WHO). They arrange vaccinations and issue and inform about travel restrictions.”

The International Air Transport Association (IATA) has put together a response plan for an avian flu epidemic and warned its members that it would result in great pressure on the industry to delay the international spread through travel and flight restrictions.“The implications for international air transport are enormous,” says IATA.

3. A European retail distributor of goods and services
“A widespread outbreak of human influenza would affect all areas of our business. The most significant aspects would be the need to maintain public health in our sales centres, the potential absence of essential employees, reduction in demand for goods and services, and the possible impact on suppliers in other countries.”
This group says its main risk management measures will be to offer vaccination and anti-viral medication to employees, create information services for employees, and use new forms of communication in cases where travel is restricted.
The risk manager adds, “A massive panic could have a disastrous result because it will probably mean consumers avoiding places which have high concentrations of the public.”

4. A national building component company
“We are asking business areas to revisit existing plans and report needs for further treatment. We are identifying alternative suppliers both up- and downstream, keeping key personnel from potentially effected geographical areas.”

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