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Ebola: Limited threat or pandemic in the making?

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I remember my teacher asking me, as a child, how much money I’d have if he gave me a penny and I doubled that penny each day for one month. I was astounded at the outcome of $5,368,709.12 after just 30 days of compounding.   

Now, let’s consider a more human element. Consider the number of people you come in contact with each and every day, or even your primary contacts. Then consider the people who had contact with your primary contacts and would be considered secondary contacts. Next multiply this by any number from 2 to 21, which is the incubation period for the Ebola virus. Now add to the equation the first documented case of Ebola in the United States.  

According to NBC News, the patient came from Liberia. He left Monrovia Sept. 19 and arrived in the United States Sept 20. Health officials won’t give many details about the patient, but Centers for Disease Control and Prevention director Dr. Thomas Frieden says he was visiting relatives who live in the United States, implying he may not himself be a U.S. citizen. Health officials also say he does not appear to have been a health worker. Prior to this case, the four Ebola patients evacuated to the U.S. for treatment have all been American doctors or medical missionaries.

About Ebola

The Ebola virus causes an acute, serious illness which is often fatal if untreated. Ebola virus disease first appeared in 1976 in two simultaneous outbreaks, one in Nzara, Sudan, and the other in Yambuku, Democratic Republic of Congo. The latter occurred in a village near the Ebola River, from which the disease takes its name.

Ebola is often fatal in humans and primates. It generally spreads from wild animals and in the human population through contact transmission.  Despite this, it is important to note that there have been previous studies that did correlate airborne transmission of the virus through pigs to monkeys.    

This may be a valid concern, as the Ebola virus is thought to mutate frequently.  The biggest concern is a potential mutation could cause easier transmission of the deadly disease. 

The average Ebola fatality rate is around 50%, ranging by strain from 25% to 90% in past outbreaks.  Ghastly symptoms include fever of greater than 101.5, severe headaches, muscle pain, weakness, diarrhea, vomiting, and unexplained bruising and hemorrhagic bleeding, often leading to organ failure, shock and death. 

Previously, Ebola has been limited to villages in Central Africa. This year has been a much different story, with the latest outbreak occurring in major population centers of West Africa. Now, the first documented case has been reported in the United States. So what does this mean from a claims perspective? 

It was originally reported that the current victim sought medical care on September 24th at which time he was released back into the public. On the 26th he returned for care to a different facility, was admitted and proper isolation methods were applied. Is there potential liability on the first medical facility should others come down with this disease? What about the first responders who are now in quarantine? Did they have contact with others? What about the ambulance that provided transport?  Has it been properly sanitized? Was there a period of time when others were needlessly exposed to Ebola? 

It is unlikely that the victim knew he had Ebola when coming into the United States, although in this day and age of increased threats against the homeland, bioterrorism should never be ruled out. The bigger concern is the advent of a true pandemic not seen since the 1918 influenza that is estimated to have killed 100 million people. 

Pandemic inevitability

Through the prism of history, pandemics have occurred every 30 to 50 years. Given the frequency and typical life expectancies, most people will see one to two pandemics in their lifetime. In many situations, the young and old are often the majority of the victims due to developing or weakened immune systems. However, the 1918 Spanish influenza pandemic was relatively indiscriminant. Arguably the worst pandemic of the 20thcentury, this pandemic occurred on the heels of WWI, killing more people than the war itself. 

The last global influenza pandemic was in 1968, with the Hong Kong flu. AIDS is considered a pandemic which rose to prominence in the 1980s and still has no cure.  

In the early 2000s, there was concern about SARS and the avian influenza, or bird flu. These viruses had high mortality rates and were spreading rapidly. Fortunately, they were eventually contained. Now we are faced with the possibility of Ebola, already a pandemic in Liberia, Guinea and Sierra Leone. This is a tremendous concern due to the high mortality rate and the toll it will take on the healthcare industry.

According to Lloyd’s of London, a repeat of the 1918 event is expected to cause a global recession with estimated impacts ranging from 1% to 10% of global GDP. Most industries will be affected, some more than others. In particular, industries with significant face to face contact such as airlines, hospitality, or even some claims organizations. Insurers investment assets may be affected depending on the mix held. Wider economic and social effects may lead to secondary forms of loss for insurers.

Liability potential

The potential impact for life and health insurers is pretty clear. In the event of a pandemic such as Ebola, emergent care is always required, and the high mortality rate will cause a spike in life insurance claims. There will be a tremendous strain on available resources trying to provide general support.

But what about other forms of insurance? Consider the impact to medical malpractice, which may come into play with the early release of the latest victim from the hospital.  What about the implications for D&O (Directors and Officers) liability or general liability policies? 

Specific products such as business interruption and event cancellation could see a rise in claim activity, although there may be some limitations for pandemic losses that could curb payouts.

There are also other impacts to consider such as the global or social turmoil that a pandemic could instigate. If emergency services are strained, this could have a ripple effect on millions of lives.  

Consider the social unrest following the acquittal in the Rodney King trial, the botched Hurricane Katrina response or more recently the Ferguson shootings. In those cases there were limited resources. What if there is a disaster of national proportions? With law enforcement already running lean, what havoc will ensue if these resources are preoccupied containing a pandemic? 


Given the rapid mutations of viruses, it is difficult to provide antiviral medication and develop vaccines. Even with the flu virus, for which millions receive flu shots, there is only protection against certain strains. Ebola is far more challenging with multiple strains, a high mortality rate, and limited research and development. It has not yet been an American epidemic, therefore much of the pharmaceutical R & D has focused on more pressing problems. 

The biggest concern is arguably globalization. For centuries, outbreaks were limited to specific geographic regions. The catalyst for the spread of the Spanish flu in 1918 was the demobilization of military troops who brought the virus home. Today, there are millions more people traveling across international borders via car, ship and plane than there were following WWI.

For the first time in history, more people are living in urban areas than rural settings. There are also twice as many people on the planet as there were in 1918. Countries with open borders or loose border security have the potential for a significantly higher risk unless strict protocols to identify and quarantine victims are implemented.  

But with all the bad news, is there hope on the horizon? On the Ebola front there may be a slight glimmer of hope. Toronto-based Defyrus is commercializing the experimental ZMapp treatment for people infected with the Ebola virus in West Africa and hopes to scale up manufacturing to produce tens of thousands of doses in 2015. 

In the meantime, it is imperative for all people to take proper sanitization precautions. Ebola, like many viruses, can be contained with simple hand washing and other hygiene. Hopefully, what we are seeing in Dallas is one isolated case that will rapidly be contained. With that said, we can’t delude ourselves into thinking that we are safe, as a deadly pandemic, Ebola or otherwise, is lurking just around the corner.