FERMA Risk Managers Respond to Avian Flu Threat

The Federation of European Risk Management Associations (FERMA) has issued a timely bulletin on the multiple risks society faces from the threat posed by the avian flu virus H5N1.

“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,” commented FERMA President Gemma Dequae “Risk management measures have to be taken.”

The bulletin notes that the “outbreak of avian flu cases (H5N1 virus) in Turkey [where four deaths have been reported] 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.”

Dequae recommended that the following steps be taken:
— 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 optimize their preparedness by revising their business continuity responses and establishing good communication channels.

FERMA’s informal survey of its member organizations revealed differing perceptions and responses to the threat of an influenza epidemic. “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.” said the bulletin. “Their responses showed that most sensitive sectors are health services, transport, telecoms and power suppliers and the food industry.” It also noted that the “French and British risk management associations, AMRAE and AIRMIC respectively, are playing an active role in supporting their members.”

FERMA’s survey also noted the following concerns and findings:
— 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 bulletin indicated that the following are the “most frequently mentioned risk management measures:
— 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

The bulletin also said, “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.”

Ed. Note: The heart of risk management is the anticipation and the prevention or remediation of loss making events before they happen; i.e. locking the barn door before the horse escapes. While it’s true the H5N1 virus has not as yet mutated to enable its transfer from one person to another [all the cases so far have been from direct contact with infected birds], that doesn’t mean it won’t. FERMA’s survey and the steps it recommends are a good example not only of the steps that should be taken to contain bird flu, but also a reminder of the increasing importance of risk management in everyone’s daily life.