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Actuaries Urge Need for Risk Management and Continuity Planning With H1N1 Pandemic
Date:6/12/2009

SCHAUMBURG, Ill., June 12 /PRNewswire/ -- With the H1N1 flu spreading globally, the World Health Organization (WHO) has declared it a pandemic. This marks the first global flu epidemic in 41 years with reports of the flu coming from Mexico, U.S., Australia and many more locations. In response to this development, members from the Society of Actuaries (SOA) are advising businesses to revisit and/or create business continuity and preparedness plans.

Much like the 1918 Spanish flu, the H1N1 global pandemic could cause thousands of deaths and significantly impact small and large businesses alike. At a recent presentation at the Enterprise Risk Management Symposium in Chicago, Max Rudolph, Fellow of the Society of Actuaries (FSA), Chartered Enterprise Risk Analyst (CERA) and owner of Rudolph Financial Consulting LLC, discussed key findings on the pandemic in relation to the 1918 outbreak. He said, "Businesses need to take a deeper look into the risks associated with their operations in coping with the possible impact of this virus. These risks include insurance risk (mortality, morbidity); economic risk (liquidity); counterparty risk (reinsurer solvency); and business continuity (claims and customer service)."

Focusing on the risks to businesses from a pandemic, Rudolph recommends companies put preparedness plans in place not only for today, but also for the next six to nine months, taking a more long-term, comprehensive look at managing risks. Rudolph stated that the pandemic's effect on the supply-chain could become a huge issue as it involves healthcare, food and energy services.

Rudolph also noted several key tips for businesses in dealing with the pandemic impact:

  • Communication: Be part of the solution in advance and think about pay/absentee policies so employees/customers are not surprised.
  • Liquidity: Have currency and credit on hand that can be pulled when times are bad. Be prepared to be flexible that customers might be cash strapped. Maintain relationships with multiple bank locations in case one is unavailable.
  • Redundancy: Use more than one supplier if possible. Think about short-term solutions if employees are unavailable because they or their family are sick.
  • Enterprise-wide Risk Management: Businesses should think about combinations of risks. A pandemic in combination with other emerging risks could create additional complexities.

"Aside from these considerations, planning and preparation are key," said Rudolph. "Scenario planning exercises are important to see where there are gaps in preparation, such as if the company closes the office and has employees work from home. Without testing and planning this could slow down computer servers, thus causing further business delays."

An audio recording of clips from Rudolph's pandemic presentation is available on the SOA Newsroom at: http://www.soa.org/news-and-publications/newsroom/erm.

About Actuaries

Actuaries bring a complex future into focus by applying unique insight to risk and opportunity. Known for their comprehensive approach, actuaries enable smart, more confident decisions.

About the Society of Actuaries

The Society of Actuaries (SOA) is the largest professional organization dedicated to serving 20,000 actuarial members and the public in the United States and Canada. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of financial risk. To learn more, visit www.soa.org.

    Contact:     Kim McKeown
                 Society of Actuaries
                 847.706.3528 or kmckeown@soa.org

                 Mike Nowak
                 GolinHarris
                 312.729.4346 or mnowak@golinharris.com


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SOURCE The Society of Actuaries
Copyright©2009 PR Newswire.
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