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  • Business: Prepared for a pandemic?

    Source: http://www.lloyds.com/News_Centre/Fe...c_02052008.htm

    Prepared for a pandemic?
    2 May 2008

    A pandemic ?flu that causes massive disruption to economies around the world is inevitable and all businesses must prepare for it now. That was the stark message to emerge from a recent high level seminar co-organised by Lloyd?s and XL.

    In a series of sobering presentations, business continuity and risk management experts explained how insurers and their customers could be affected by a pandemic and what they can do to mitigate the fall-out from a nightmare scenario.

    In risk management terms, a pandemic is unlike any other natural or manmade disaster that businesses routinely prepare for. A ?flu pandemic is not a sudden, short lived event like a terrorist attack or industrial explosion that destroys infrastructure in a localised area. It could last for months.

    ?Nobody knows when this will happen, so it is a challenge to make it real to people,? Professor Lindsey Davies, national director of pandemic influenza preparedness at the Department of Health admitted. ?But it will happen.?

    When it does happen, a pandemic flu outbreak will come in one or more waves each lasting about 15 weeks nationally, weeks or months apart. If the pandemic starts elsewhere, it will probably reach the UK within 2-4 weeks.

    Droplets (from sneezing) are the main route of spread; the incubation period is 4-5 days from the onset of symptoms. A reasonable scenario for the UK is a clinical attack rate of 50% of the population with maximum case fatality of 2.5% of those with symptoms. Adults with uncomplicated ?flu may be off work for up to 10 days.

    Clearly, companies need to have policies and procedures in place to keep their business running with a greatly reduced workforce. They need to consider the affect a pandemic will have on their supply chain as well as their customers and how they are perceived. In a pandemic crisis, they must be ready to make radical changes to the way they work.

    What is unique about a pandemic crisis, in terms of business continuity, is that no institution will escape it ? including the emergency services. As Commissioner Mike Bowron of the City of London Police put it, ?The challenge for us, like other organisations, will be maintaining a good service with a high absentee rate. It will be difficult to encourage people to come in to work.? The commissioner stressed that they had taken steps to mitigate this risk.

    When the UK?s Financial Services Authority simulated the effect of a pandemic ?flu on the City it assumed an absence rate of 49%. Richard Maddison, deputy head of business continuity risks at the FSA, said that the exercise revealed that from the outset participants? were not fully aware of the impact a pandemic would have on their suppliers and that there was uncertainty about how a pandemic will spread. ?Plans and HR policies need amending,? he warned.

    All the evidence points to a lack of preparedness among business. A YouGov survey last year found that over three quarters of companies have inadequate plans; around a third have no strategy at all.

    Drawing a pandemic timeline, the FSA?s exercise showed how institutions will be challenged as a pandemic quickly develops momentum. Chillingly, by week five of the simulation, companies were extending HR policies to include emergency financial support, accommodation and death in service benefits to employees.

    The insurance industry will potentially have to cope with an variety of claims , while it is still reeling from its own business continuity problems, Trevor Maynard, emerging risk manager at Lloyd?s, said. Life and health programmes will be directly impacted but less immediately obvious losses could pile up as businesses grind to a halt, from credit insurance to event cancellation.



    Top 10 tips for businesses to cope with a pandemic

    ? Although the emergency services are taking pandemic preparedness very seriously continuity plans should consider the impact of a reduced level of service.

    ? Educate your staff in advance on the hygiene and quarantine procedures they may need to take.

    ? Identify who your key personnel are and explore cross training to help cope with absent staff.

    ? Check that your suppliers are as well prepared as you are for a pandemic.

    ? Decide on corporate priorities and the key services that must be maintained.

    ? Exercise contingency plans against the timeline of a pandemic.

    ? Fully understand how telecommuting can serve the business and where the weak points are.

    ? Evaluate your requirements for bandwidth at your gateway and consider buying extra now.

    ? Be prepared for subsequent waves and plan for the recovery phase.

    ? Expect a more fluid job market as employees react to how they were treated by employers during the pandemic.
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