For U.S. life and health insurance agents, the new coronavirus could be another false alarm — but it, or something like it, could turn out to have an impact.
The 2002-2003 severe acute respiratory syndrome (SARS) outbreak, the Middle East respiratory syndrome (MERS) outbreak that flared in 2014, and the 2015-16 Zika virus outbreak ended up having little effect on typical U.S. agents.
Influenza kills thousands of people every year, but, in recent decades, the main direct impact on agents has probably been to force some to stay home for a few days.
At this point, public health authorities say, the coronavirus outbreak that started in 2019 in the city of Wuhan, in China, appears to be mainly a problem for people who live in Wuhan — but Li Bin, deputy director of China’s health agency, the National Health Commission of the People’s Republic of China, said Wednesday, at a press conference in Beijing, that the virus could mutate.
“The epidemic is at risk of spreading further,” Li said, according to a Google Translate translation of the press conference transcript.
- Here’s a link to the CDC’s 2019-nCoV situation summary page.
- Here’s a link to the National Health Commission of the People’s Republic of China English-language news release page.
- Here’s a link to a Chinese-language transcript of China’s Jan. 22 press conference on the virus. (One way to read it is to install the Google Translate browser tool.)
- Here’s a link to an article about an analysis of the possible effects of a disease similar to the 1918 Spanish flu on U.S. life insurers.
- Here’s an article a sister publication ran about the possible effects of SARS on insurers in 2003.
Here’s a look at three agents might want to know about the outbreak.
1. Public health specialists aren’t sure what to make of it.
The U.S. Centers for Disease Control and Prevention (CDC) is calling the virus the 2019 Novel Coronavirus, or 2019-nCoV.
China has identified 964 confirmed or suspected cases of the virus, as of Wednesday, including 95 cases severe enough to require invasive mechanical ventilation, and 17 leading to death.
Most of the patients who have died have been people age 60 and older who had serious health problems before the came down with 2019-nCoV infections, but one was a 53-year-old man with no known serious health problems.
The known 2019-nCoV patients have started out with symptoms that included fever, a cough and shortness of breath.
Coronaviruses typically spread from animals to people, but officials believe that 2019-nCoV is spreading from person to person through the moist droplets that go into the air when sick people cough or sneeze.
The earlier SARS and MERS outbreaks were both caused by coronaviruses. The SARS outbreak eventually caused 8,098 known cases and led to 774 deaths, with most of the cases and deaths occurring in China and Hong Kong, according to CDC data.
The 2014 MERS outbreak in Saudi Arabia led to 688 confirmed infections and 282 deaths, according to public health officials in Saudi Arabia.
“Spread of SARS and MERS between people has generally occurred between close contacts,” according to a CDC 2019-nCoV situation summary report.
But public health officials in China have taken aggressive steps to guard against the possibility that the 2019-nCoV virus could infect more people, mutate, and become much more contagious.
Officials in China have sharply limited movement of people in and out of Wuhan, shut down public transportation, closed movie theaters, asked people to wear face masks, and added many other restrictions and programs. Some other cities in China are taking similar steps.
The United States and other countries are now screening some passengers flying in from areas affected by the 2019-nCoV outbreak for signs of viral infections.
The CDC has put this note at the top of its own 2019-nCoV situation report: “There is an ongoing investigation to determine more about this outbreak. This is a rapidly evolving situation and information will be updated as it becomes available.”
2. Insurers and brokers in the travel insurance community are already reacting to the outbreak.
Travel insurance policies can cover trip cancellations and interruptions as well as travel-related medical expenses, and medical evacuation services.
The Allianz travel insurance unit has put a “Coronavirus Outbreak” item on its coverage alerts page.
“The events listed below are considered ‘known and foreseeable’ for travel insurance purposes on the date listed next to the event,” according to the notice. “Travel insurance may not provide coverage for an event if the policy is purchased after the event becomes known and foreseeable. Please consult your policy for more information.”
Another travel insurance provider, Seven Corners, provides a direct link to the U.S. State Department travel advisories page. The State Department has put a “Level 2: Exercise Increased Caution” note for people traveling to China.
Squaremouth, a travel insurance broker, has set up a China Coronavirus Outbreak Travel Insurance Information Center web page, to explain travel insurance coverage for the outbreak.
“This resource is regularly updated by Squaremouth’s travel insurance experts with official provider position statements, answers to frequently asked questions, and more,” according to a notice on the page. “Information is subject to change at any time.”
Examples of Insurance Community Coronavirus Outreach
Some takeaways for agents are that 2019-nCoV is probably increasing interest in travel insurance; that at least some insurers are imposing new, outbreak-related restrictions on new travel insurance policy sales; and that the outbreak is giving some brokers a chance to demonstrate their expertise.
3. Detailed pandemic-oriented business continuity guides are scarce.
What if you and most of your employees get sick? What if your community imposes restrictions on your ability to get out of town?
Typical business disaster prep guides focus on preparations for events such as floods, windstorms, fires, cyber attacks, and the death of the owner.
Most mention pandemic risk only in passing. Some resources that might help are listed below.
Pandemic Continuity Resources
- Here’s a CDC pandemic business planning site. The site links to a PDF pandemic planning checklist for businesses, and a separate checklist PDF for businesses with overseas operations.
- Janco Associates Inc., a management information systems company, has sketched out business pandemic planning steps here, in a page promoting a disaster recovery guide aimed at managers of big information technology operations.
- Analysts from Gartner Research Inc. talk about business continuity lessons in a look at lessons learned from Hong Kong’s SARS outbreak.
— Read Relax, the new SARS cousin isn’t that scary, on ThinkAdvisor.