Zika impact to spread into commercial insurance

by |
In the wake of last week’s declaration by the World Health Organization that the Zika virus is an international public health emergency, brokers and insurers should prepare for an impact beyond the travel sector.

As of February 8, seven Canadians have been diagnosed with the virus, all of them travellers who visited regions where it was spreading. Travel insurance outlets have reported an increase in policy inquiries and the Public Health Agency of Canada has recommended that pregnant women and those trying to become pregnant reassess their travel options if planning to go to a region where the virus is present.

But there is also a potential impact on health or property/casualty insurance companies, which will certainly be keeping a close eye on the development of the disease, with the likes of Anthem Inc. and UnitedHealth Group issuing alerts to policyholders about the virus.

If past events involving major health crises are any guide, the greatest effects will be on business interruption and workers’ compensation policies. When the Ebola virus gripped much of the world in 2014, several carriers released Ebola-specific products that provided for business interruption coverage in the case of an outbreak. Because traditional policies require a physical event to trigger coverage, these policies filled a perceived gap in the market.

At present, Zika has been reported in 28 countries, predominantly the Americas, where WHO has associated the virus with microcephaly in mothers who become infected while pregnant. China noted it first case of infection on Wednesday.

In a recent discussion with Insurance Business on the World Economic Forum (WEF) Global Risk Report 2016, John Scott, chief risk officer of Zurich Global, identified global disease outbreaks as main risk in focus.

“Clearly a global pandemic of some sort will really be the thing that wipes out the human race at some point,” he warned.

“It is a fact that we’ve had pandemics – the last one was Swine Flu and it did get around the world -- but fortunately it wasn’t as virulent as it could have been, and that’s a difficult thing to say.”

Although many people died during the Swine Flu outbreak, Scott said that the disease wasn’t as fatal as Ebola, “which really caught peoples’ attention because it is such a terrible disease, with such a high chance of dying. But fortunately the outbreak was managed very well,” he said.

“One of the fears about urbanisation is that with so many people living together it’s easier for diseases to spread,” Scott told Insurance Business.

Indeed, the infection vector for Zika has moved from mosquitoes to sexual transmission in colder climates. But with spring just around the corner for much of the developed world, medical entomologists are considering whether mosquitoes common to regions like Canada could carry the virus if infected. The answer at the moment appears to be: “we don’t know”.

Insurance Business forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions