IRMI Update
Risk Management & Insurance
Commentary, Tips, and Tactics
May 6, 2009 | Issue 205 | ISSN: 1530-7948
In This Issue
Colleague,
While it is still too soon to know for certain, the world may have dodged
a bullet with the swine flu outbreak. If this turns out to be true, as we all
hope, the event may have been one of the most useful risk management opportunities
you have ever had.
We've discussed before in this newsletter the unfortunate aspect of human
nature that causes people to underappreciate risks that they have never seen
turn into loss-causing events. Additionally, the cost of testing business continuity
plans often causes organizations to forgo adequate testing. The swine flu outbreak
has caused people to sit up and take notice of the very real risk of pandemic
and to put their response plans into motion (or experience the problems of not
having one in place).
As you manage the still developing issues surrounding swine flu in the ensuing
weeks or months, be sure to also use this as an opportunity to both learn and
teach. Note what worked, what didn't, and what your organization (or clients)
could or should have done better. Also use it as an example of the real risks
of pandemic with skeptics who have not supported appropriate preparation. After
all, the swine flu will have imposed very real costs on every organization in
the world because of the huge loss of productivity it caused even if it disappears
tomorrow. Additionally, the risk of a more virulent outbreak occurring in the
fall, as happened with the 1918 Spanish Flu, is very real.
In keeping with this thinking, this week's risk tip from a business continuity
planning expert (below) reveals a few of the lessons already learned from the
swine flu outbreak. What lessons have you learned?
Please share some of your
observations, ideas, and suggestions for future pandemic response planning
with fellow readers so that we can all be better prepared next time.
While we may soon reach capacity, we still have room for you in our May 28
webinar on nonstandard
additional insured endorsements. I'm looking forward to conducting this
program with my colleague, Jeff Woodward, and we hope you will join us.
All the best,
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
International Risk Management Institute, Inc.
Risk Tip
Use Swine Flu Lessons To Adjust Your Pandemic Response
Plan
Almost half of businesses in the United States developed pandemic plans when
the bird flu threat was highly publicized in 2005 and 2006, but were those plans
immediately effective for the swine flu outbreak? Unfortunately, the answer
may be "No."
Bird flu (or H5N1) plans made many assumptions that have not been true in
the current outbreak. Most importantly, almost everyone assumed the outbreak
would begin in Asia and that we would have 2-4 months to prepare in North America.
That wasn't the case. People assumed that the U.S. government would follow its
federal pandemic response plan, which mapped U.S. response stages to World Health
Organization Pandemic phases, and that hasn't happened. Those plans also assumed
that the virus would have high rates of hospitalization and mortality which
we haven't seen (at least not yet).
What's the key lesson learned that should become an action item? Make sure
you operate in a collaborative environment. Extend your collaboration into your
global supply chain. Since governments around the world will respond differently,
involving management and business partners in other countries is critical. Use
your pandemic response team meetings to hear what the conditions on the ground
in different parts of the country and world really are, instead of getting information
from the news. Lastly, use this swine flu outbreak to learn how third-party
responses to a pandemic threat affect your operations. As did Robert Redford's
character in the movie, The Last Castle, you can rely on this disruption to
reveal the likely response of third parties in a future similar situation.
By: Michael Keating, Director
Navigant
Consulting, Inc.
Atlanta
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