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From Resource, April 2006
Copyright by LOMA
Special
Report:
Avian Flu and Insurers
Part 1: Is Your Company Prepared?
Part
2: Conversation with a Medical Director
Avian
Flu: Is Your Company Prepared?
With
the rapid spread of the deadly H5N1 strain of avian (bird) flu from Asia to
Europe
in the last few months, governments and businesses around the globe have begun
devising contingency plans so that their business could continue to function if
the virus were to cause a pandemic. Five insurers recently participated in a
LOMA survey that asked them to explain the status of their contingency plans and
what steps they’re taking to prepare for the worst. Here’s what they had to
say.
By
Stephen Hall
If
the avian (bird) flu becomes a pandemic, is your company prepared? The
last major pandemic occurred in 1918, when an influenza strain known as
“Spanish flu” killed somewhere between 20 million and 40 million people.
According to science, pandemics occur every 10 to 50 years, and the world is
long overdue for its next one. Many scientists say that H5N1, a deadly strain of
avian (bird) flu that first appeared in
Hong Kong
in 1997, will likely trigger the next pandemic. In the last few months, it has
spread from Asia across Europe and into
Africa
at an alarming rate, primarily through bird migratory routes.
Scientists
say human infection is currently possible only when people come in close contact
with infected chickens or wild birds. But scientists are concerned that H5N1
could mutate into a form that is easily transmitted among people and set off a
pandemic that could kill anywhere from 25 to 165 million people worldwide,
according to the World Health Organization’s (WHO) projections.
As
for the potential economic impact, the World Bank estimates that such a pandemic
could cost as much as $800 billion worldwide. In addition, the Insurance
Information Institute (III) estimates that such a pandemic could result in $133
billion more in death claims for life insurers than would be expected in the
absence of a pandemic—a figure that doesn’t even include claims from other
insurance products, such as health care.
In
January, LOMA sent out an informal “Quickie Question” (QQ) Survey to 22 of
its larger member companies (organizations with total assets of $30 billion or
greater) that included the following four questions:
1)
Is your company reviewing policies, pay practices and business continuity plans
in case the avian flu becomes a pandemic event? If so, what additions and/or
changes are you making in the event of a pandemic?
2)
Do you feel your current policies, pay practices and business continuity plans
adequately address an event such as this, or do you expect that some changes,
exceptions and/or new policies will be made, such as travel restrictions,
restricted access to company property, sick pay, work at home schedules, and
screening of employees and visitors?
3)
Do you have expatriate employees on assignment in or near an affected area? If
so, what actions have you taken or may be considering for their safety (i.e.,
evacuation back to the
U.S.
or another “safe” location, early/additional home leave visits)?
4)
If an expatriate employee asks to leave their assignment, contrary to
company-initiated action, how would their request be handled (i.e., transfer,
repatriation, termination of the assignment)? Also, would expenses associated
with the relocation be at the company or employee’s expense?
Five
of the 22 companies who received the survey agreed to participate, and of those
five, four consented for their survey responses to be reprinted for this story:
Manulife Financial Corp., Nationwide Financial Services Inc., and two companies
that did not wish to be named (and will be referred to here as “Company X”
and “Company Y”). In addition, the chief medical officer of Nationwide
consented to a separate phone interview with Resource in which he discussed his thoughts on avian (bird) flu and
the measures that Nationwide is taking to be prepared in case a pandemic occurs.
(To read his comments, please see “Pandemic Preparations at Nationwide: A
Conversation with Dr. Michael Moore” following this article.)
Manulife
Financial Corp.
In
her response to the LOMA survey’s question about possible changes in company
policy, pay practices and/or business continuity plans if a pandemic occurs, a
representative for Manulife wrote: “Active planning efforts are under way.
Broadly speaking, we are bolstering existing plans and policies. We are creating
new documentation to help us assess the severity of the impact to our business
and aligning this with the WHO model. Business units are specifically addressing
the need to keep key business functions operational with a potentially severely
reduced staff. Policies and pay practices were updated to address health
concerns during the SARS epidemic [in 2002] and are presently considered
adequate for an avian flu pandemic.”
According
to the Manulife representative, work from home would be a major component of
their response to an avian (bird) flu outbreak. “A move to that strategy is
not considered a policy change so much as the implementation of an existing
planned response,” she wrote. “Many of the items mentioned are already
planned responses, and implementation will remain fluid to meet a presently
unknown impact of the situation.”
Addressing
the survey question about expatriate employees on assignment in or near an
affected area, the Manulife representative wrote: “The safety of all
employees, including expatriates, is of extreme importance to the company. The
action taken to protect those in affected areas will be gauged to the threat.
The suggestions listed above are all options for how to deal with the crisis and
will be used according to a judgment about their effectiveness.” If an
expatriate employee asked for permission to leave their assignment due to a
potential threat of infection, then according to the Manulife representative,
“In a bona fide crisis, either the employee or the company may initiate a
request to leave an assignment to protect the employee’s well-being. The
company would pay the cost. As in the other responses, the exact nature
(transfer, repatriation, etc.) will be dictated by the assignment and severity
of the threat.”
Nationwide
Dr.
Michael Moore, M.D., FACP, vice president—chief medical director for
Nationwide, completed the survey on Nationwide’s behalf. In his response to
the first question, he wrote that Nationwide has actively reviewed all of its
disaster planning and is in the process of addressing staffing shortfalls that
could occur as the result of a pandemic and how the company would deal with such
an issue. “We have modified our attendance policy to allow supervisors (with
nurse consultation) to send sick employees home,” he wrote. “We have ordered
N95 masks for all of our occupational nurses, met with state and local health
officials to review our plans, and have created the Avian Flu Working Group, an
internal task force made up of members from health, business recovery, employee
safety and HR to oversee preparations.”
Regarding
whether current policies, pay practices and business continuity plans are
adequate,
Moore
wrote: “We are trying to anticipate what might happen, but will likely need
to adjust to situations on the fly. Travel restrictions are likely with regard
to affected areas if person-to-person transmission arrives.” There are
currently no expatriate employees of Nationwide on assignment in or near an
affected area, according to Moore, but if a situation arose in which an
expatriate employee was working near an affected area and a pandemic were to
start, “we would likely approve either work from home, temporary transfer to a
‘safe’ location, or return them to the U.S., likely at company expense,”
he wrote.
“Company
X”
“Company
X” indicated that it is actively reviewing policies, pay practices and
business continuity plans in case the avian (bird) flu becomes a pandemic event,
“but this work has just started so we can’t provide an all-inclusive list of
additions and changes.” On the question of whether it considers its current
policies, pay practices and business continuity plans to be adequate in
addressing a pandemic scenario, it wrote: “No, we are reviewing our business
plans and all appropriate policies and pay practices, including topics noted in
the question.” The possibility of imposing travel restrictions in the event of
a pandemic has been put on the table for further discussion, they said. Finally,
they noted that the possibility of expatriate employees requesting to leave an
assignment in order to avoid infection is a matter that has not yet been
addressed, but will be as part of the company’s overall review of its pandemic
preparedness plan.
“Company
Y”
“Company
Y” wrote that it is “actively working on a plan and considering several
changes to policies, such as increasing the number of paid sick days,
implementing additional telecommuting, providing hand sanitizers, masks and
gloves, limiting travel, and providing information and tips for how to prevent
the spread of the virus, et cetera.” They said they “expect some changes”
to their current policies, pay practices and business continuity plans to
adequately address a pandemic event. In addition, they noted that a scenario in
which expatriate employees would be on working in or near an affected area
“does not apply” to them. Finally, with regard to an expatriate employee
requesting removal from an assignment due to a pandemic threat, “Company Y”
wrote: “We don’t have policy wording yet.” ■
[sidebar]
[head:]
Planning for a Pandemic: Where Should You Start?
As
the industry begins moving to address the threat of a potential flu pandemic and
the alarming costs that could result from such an event, there is probably some
confusion about where to begin. Dan Murphy, vice president of enterprise
continuity at MassMutual, has a few suggestions:
■
“A great starting place would be the Business Pandemic Influenza Planning Checklist that was developed by
the Department of Health and Human Services (HHS) and the Centers for
Disease Control and Prevention (CDC),” he said. This checklist can be found at
http://www.cdc.gov/business.
■
Murphy also suggests working with city
and state public health agencies and emergency preparedness organizations.
■
“Each company should perform an internal risk assessment to identify the unique issues that they
would face, given the impact caused by high absenteeism rates for an
extended period,” Murphy said. “The projected impact of a pandemic does
present a situation that will require a review of various policies as well as a
review of existing business continuity plans.”
■
Finally, as with any emergency planning activity, “Having
discussions and plans developed in advance of the situation allows a more
thoughtful response when an event occurs,” Murphy said.
For
additional planning resources, please visit the following Web sites:
■
www.cdc.gov
■
www.healthyamericans.org
■
www.pandemicflu.gov
Part
2:
Pandemic
Preparations at Nationwide: A Conversation with Dr. Michael Moore
The vice president and chief
medical director for Nationwide discusses what his organization is doing to
prepare for a possible flu pandemic, and what he suggests for the rest of the
industry.
By
Stephen Hall
With the Insurance Information
Institute’s (III) recent estimate that a flu pandemic could cost the insurance
industry as much as $133 billion in death claims, many in the industry are
scratching their heads and wondering what they can do to prepare their
organizations for such a possibility. But at Nationwide, work has already begun
in earnest.
For starters, a task force
called the Avian Flu Working Group has been assembled to help assess the ways a
pandemic could affect Nationwide’s business functions and to help create and
implement contingency plans that would help Nationwide continue to function in
the face of such an event. The company has also created a “green-yellow-red”
worksheet—a device similar to the U.S. Department of Homeland Security’s
color-coded advisory system—that specifies a series of actions and protocols
that would go into effect as certain conditions pertaining to avian (bird) flu
arose. The Columbus, Ohio-based company has also been in regular communication
with federal, state, and local health agencies in order to develop good working
relationships between the agencies and Nationwide in anticipation of a pandemic
scenario, in which time would likely be a critical factor.
Dr. Michael Moore, M.D., FACP,
vice president—chief medical director for Nationwide, spoke with Resource
about these and other steps his company is taking to prepare itself for the
conditions that could arise if the deadly H5N1 strain of avian (bird) flu, which
has been spreading rapidly from Asia across Europe and into Africa in recent
months, triggers a pandemic that could threaten the lives of millions around the
globe. His comments are below.
Q:
Can
you elaborate on the Avian Flu Working Group that’s been created at
Nationwide?
MOORE
: In creating the Avian Flu Working
Group, we tried to recruit employees who were representative of the areas of the
company that would be affected if a pandemic occurred. I was involved in
starting it up, and then we brought in our HR group, who deals with employee
affairs, regulations and so forth. And then it expanded to address business
recovery for those employees who might be affected.
We have a lot of business
recovery plans if, for example, a hurricane hits
Tampa
or an earthquake hits
San Francisco
. We’ve never dealt with anything before that would hit every company or every
outlet at the same time. The public officials we’ve met with have told us to
prepare for a 40 percent absence rate for at least a couple of months, if indeed
a worst-case scenario occurred. And as our conversations started to occur, we
realized that we really didn’t have a lot of the things we thought we had. For
example, we always assumed we had the right to send a sick employee home. So we
pulled out our employee handbook and looked for a sentence or passage that
states that. It wasn’t there. And so we modified our internal regulations to
say that if a person reports to work and exhibits such symptoms as coughing,
fever and vomiting, then in consultation with a nurse, a manager can send that
person home.
We’ve tried to model our
working plan after what the federal government has done. And I use a mnemonic
device called “PMIT,” which stands for “prepare, monitor, isolate and
treat.” One of the things the federal government is telling people is that if
you have a vital substance that is the lifeblood of your company, then you
should make sure you have a supply of it that will last from two to four weeks,
because your supply chain may not be reliable. Suppliers are going to have 40
percent absence rates, just like everybody else. So we want to raise awareness
of that reality. We also want to get word out to our employees and say, “Make
sure you have a survival kit at home.” So we’re going to include a post on
our internal Web site that specifies what a survival kit should include, such as
how much water per individual per day, and for how many days. We will advise
them to make sure they have enough of the medicine that they would normally take
during a two- to four-week period, because their drugstore may not be open. We
will advise them to make sure they have enough food, flashlights and other
necessities. We’re also working on putting together a plan, which we’ll send
out to all of our offices, that covers issues like monitoring and isolation.
I’ve been monitoring information from the CDC and the WHO and forwarding that
information to our Avian Flu Working Group. If the situation with bird flu
starts to heat up, what we would probably do is start sending that information
out to supervisors, managers, and anyone else who needs it.
Q:
Explain the “green-yellow-red”
worksheet that Nationwide’s Avian Flu Working Group has devised.
MOORE
: Here’s how it works: If situation
X happens, we’re in Condition Green; if situation Y happens, we’re in
Condition Yellow; and if situation Z happens, we’re in Condition Red. We’re
in Condition Green right now, because there’s been no person-to-person
transmission and nothing here in
North America
yet. We would go to Condition Yellow if person-to-person transmission developed
outside of the
U.S.
, or if a case of avian flu is reported in
North America
. Finally, we would go to Condition Red if person-to-person transmission were to
hit
North America
. And each one of those events triggers a certain level of action on our part.
For example, Condition Green is
basically preparation; it’s about making sure you have cleaning supplies. A
lot of the things that the government is recommending are very simple steps:
Make sure you have cleaning supplies with antibacterial agents that you can use
to clean common touch areas, such as doorknobs, stair railings and elevator
buttons. Make sure you have gloves available so that if you find something
that’s been exposed, you don’t inadvertently expose more people while trying
to clean it up. Make sure you have hand cleaner available for people so that
they can frequently sanitize their hands.
If we were to ever go to
Condition Yellow, only the most essential business travel would be permitted. We
would certainly minimize, if not outright ban, travel to any place in which
there is person-to-person transmission. We would begin to look at alternative
work environments so that people can work from home. A lot of what we do can be
done on a computer. Approximately half of our people have VPN (virtual private
network) access, so they can get into our systems to do what they need to do to
properly do their job from an alternative location. VPN is what our systems
people do so that employees can safely get into our systems and still have a
secure environment. The idea is that we try to keep the people who are healthy
away from the people who are sick, and keep the people who are sick at home and
out of the office.
Condition Red would take effect
if person-to-person transmission were to occur in
North America
. In that situation, we would be utilizing what we call “social distancing,”
or keeping people from congregating. For example, instead of having a meeting,
you would have a teleconference. You wouldn’t shake hands with people. Instead
of me walking over to the other side of the building to tell somebody something,
I would call them. People who would normally be going to conferences or meetings
would dial in instead. We would try to keep people that are able to work out of
the office, out of the office so that they are not exposed and are not exposing
people to different elements.
Q:
Has Nationwide had any discussions with
federal, state and/or local agencies in formulating its contingency plans?
MOORE
: We’ve met with both the state of
Ohio
and the
Columbus
city health departments to get a sense of how they would react if a pandemic
were to start. That way, we would know what they plan to do, and we wanted them
to know what we had planned as well. We actually let them review our plan and
see what they thought, and we took their suggestions to heart. Those meetings
also provided us with contact information; now we know who to call in each of
those two organizations and how to reach them. Similarly, they know who to call
in our organization and how to reach them. And that’s already been paying
dividends. We’ve had a couple of instances where they have been sending us
information—not about avian flu, but just about seasonal flu. So we’re able
to monitor that here in the county that we’re located in. I recently gave a
presentation to the ACLI’s 2006 Executive Roundtable, and one of my
recommendations was to meet with local health officials where your business is
located, because they are really going to be your entrance into the government
treatment system.
If there is a pandemic, the two
elements that I hope are going to happen are vaccinations and treatment with
Tamiflu. The federal government is not going to be the distributor of those
resources. They will hold a stockpile, but they will then give that to local
health departments, who will in turn determine how it gets distributed. So it
would be very useful for them to know how to get into your organization and who
the right people to talk to are. Similarly, it would be nice for you to know who
the appropriate contacts are in your local health department. When we met with
both the state of
Ohio
and the
Columbus
city health departments, we asked them, “How are you going to function if you
have 40 percent of your nursing staff out with the flu?” They hadn’t thought
about that. So we said, “Well, we have an occupational nursing service. We
have a number of nurses here in
Columbus
and around the country. Perhaps we could help bolster your distribution
efforts, if indeed it comes down to a question of manpower, in terms of trying
to get medicine out to the right people.”
So here’s where we are on our
planning timetable: We’ve designed the plan, we’re putting the finishing
touches on it, and our next step is to meet with senior management and say,
“This is what we’ve got planned, and this is how we are planning to handle
this.” We think it’s a fairly non-controversial plan, because it’s
following basically the same guidelines that are part of the federal
government’s plan. It’s fiscally responsible, because the most that we’re
really asking people to do is stock up on some cleaning supplies. So if the
pandemic does not hit—and frankly, the odds are that it won’t—they
haven’t invested in anything more than some cleaning supplies, which they’re
going to use anyway. It’s a plan in which we are following all the guidelines
that the federal government is suggesting.
In other words, we’re not
recommending that people stockpile Tamiflu. We held that discussion for about a
minute-and-a-half and said, “Is this something that we want to even look into,
even if we could get it?” And the general conclusion was that stockpiling
Tamiflu would not constitute the behavior of a good corporate citizen, because
in stockpiling Tamiflu, you’re potentially keeping it from people who really
do need it. So we’re not going to stockpile it. We’re just working with the
local health department and following their guidelines.
Q:
Overall, what kind of grade would you give
the industry, as far as their development of contingency plans in the event of a
flu pandemic?
MOORE
: I think they’re probably a grade
C, and on their way up to a B. Ever since I gave my presentation on pandemic flu
to the ACLI’s Executive Roundtable, I’ve had half a dozen organizations call
me and ask for reprints of the handout that accompanied my presentation. I
talked to the ACLI a week or so ago, and they said my handout has been the most
requested piece of literature that they’ve had in at least the past several
months. So the word is getting out that this is something that needs attention
and is potentially very serious on two levels: for us as employers, and for us
as life insurers. I think the Insurance Information Institute’s (III) recent
estimate that a pandemic could cost the industry $133 billion got everybody’s
attention as well. If my words of warning weren’t enough, that certainly got
the attention of the CFOs.
Q:
Are there any particular stages or aspects
of preparation that you think are being overlooked by many companies?
MOORE
: At this point, I think that if
anything, people are not giving it the attention it deserves. The reaction I
received after talking with some of the CEOs at the ACLI Executive Roundtable
was, “Well, I heard about this, and I knew it could be a problem—but I never
knew it could be that big a
problem.” I think many people are thinking of it in terms of localized,
weather-related disasters that we’ve dealt with in the past and saying,
“Well, we did fine with the hurricane.” Well, a flu pandemic is not like a
hurricane. True, it’s not going to knock down buildings, but when you start
talking about a 50 percent mortality rate among people who have tested positive
for bird flu, you realize this is a different scenario. Also, most people think
of flu as affecting just the very young and the very old, but among those who
have contracted bird flu, the people who are having the highest mortality rate
are ages 15 to 40. That always surprises people. Most people who remember the
Hong Kong
flu outbreak look back on it and say, “Yeah, that was that funny disease back
in 1968.” But most people don’t realize that
Hong Kong
flu had 10 times the lethality of normal seasonal flu. About 30,000 Americans
die from flu each year; 300,000 died from
Hong Kong
flu. So while there was an upward blip on the mortality chart, it really
didn’t get a lot of people’s attention. But even if that scenario arose
again, a flu strain that has 10 times the lethality of seasonal flu is not an
insignificant problem.
Q:
What advice would you have for a company
that wants to start working on contingency plans for a potential pandemic, but
doesn’t know where to begin?
MOORE
: There are two Web sites that I
advise people to go to. One is pandemicflu.gov; that’s the official federal
government Web site for that. There’s another one called healthyamericans.org,
which has a pamphlet titled “It’s Not Flu as Usual.” It has a lot of
useful advice, including how you can tell annual flu from pandemic flu, what to
do in the event of an outbreak, and 10 steps your businesses can take. And I
think it is probably one of the best things I’ve seen in a very compact
brochure.
The other thing I would tell
people is, begin now. If you wait until we start to see person-to-person
transmission, even in
Europe
, you’re going to be so far behind, you’ll never catch up. There is a
possibility that a pandemic won’t occur, and a few years from now, we may look
back and say, “Boy, what were we all worried about?” But this is a disaster
for the poultry industry overseas. They’re reporting that about 200 million
chickens have been killed in an attempt to stamp out bird flu. The other news
item that broke recently is a reported case of H5N1 in
Iraq
. And one of the main vehicles by which the Spanish flu spread back in 1918 was
GIs returning from World War I. So when I read about the H5N1 case in
Iraq
, that sent a chill up my spine, because we’ve got hundreds of thousands of
American soldiers over there who are rotating back after their tours of duty,
not to mention all the private construction people and other expatriates over
there who keep returning to the
U.S.
That sounds eerily similar to what happened in 1918.
I think that we at Nationwide
are probably ahead of the curve, in terms of being prepared. But even then, at
times it feels like we’re playing catch-up. So if you haven’t begun to think
about this, it’s time to put this on the fast track. ■
FOR
MORE INFORMATION:
The LOMA Information Center has a Brief on avian flu and can offer other
references. Contact the Center at infoctr@loma.org
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