In February 2003, an infectious disease known as severe acute respiratory syndrome (SARS) emerged, claiming hundreds of people, costing companies and airlines US$30 billion in losses, and causing a dip in GDP for some countries--a scenario that could happen again.
The mysterious coronavirus that was first detected in the Middle East in June 2012 has since killed 11 people, according to the World Health Organisation. The virus could cause multiple organ failure, resulting in a high mortality rate of 56 percent - in contrast to 11 percent for SARS.
While there is a cloud of uncertainty around the magnitude of the threat posed by the deadlier virus, businesses should closely watch its progress. The coronavirus should be taken into account when companies do their risk management exercise and scenario setting.
The risk of a pandemic is higher for organisations with global or multilocation operations, facilities, delivery channels and international supply chains, as well as for those with employees who travel internationally.
There are at least three different levels on which a risk SARS can impact business, according to corporate risk consulting company Mercer Oliver Wyman. The first and most important level is the human health dimension. The second and third levels are the economic consequences of the pandemic itself and of the responses to the threat of a pandemic.
A report by Mercer Oliver Wyman notes that a widespread pandemic endangers the well-being of a business’ employees and customers, and the business has a moral, and often, legal obligation to take measures which mitigate the direct threat to the lives of these stakeholders.
Some 70% of businesses in a global survey conducted on pandemic preparedness believed that a pandemic would damage profitability. Despite this risk, only 47% have a business continuity plan that takes into account this pandemic risk and even fewer, 17%, have budgeted for pandemic preparedness.
Though WHO officials do not believe that the new virus will break into a pandemic like SARS did, they are already worried because 65 percent of the confirmed cases have ended in death and they are not yet sure of how the disease is spread or its origins.