Financial sustainability, health and safety of customers and staff members, job security of staff, and business plans and projections, are the main exposures brought about by the Covid-19 pandemic; and risk managers need to play a central role in their management, according to a board member of the Hong Kong chapter of Parima.
The risk manager, who chose to remain anonymous, said he was not surprised by how unprepared the world was for the rise of pandemic, despite the warnings given by SARS, MERS and other previous outbreaks.
“It was quite unexpected that Covid-19 could spread so widely and quickly, so I was not surprised how unprepared the world was.
“I believe SARS was very different as it was more localised in Hong Kong and China, and not so much in the rest of the world,” he pointed out.
“The insurance sector did exclude pandemic risks after that from general insurances. There were and are some specialty products to cover pandemics, however they are not commonly taken up by large corporations, mainly because of the price and the cover,” he said.
The Hong Kong-based risk manager was asked how could and should pandemic risk be more effectively identified, measured and managed, and what role the risk manager should play in such a crisis.
“Pandemic is an emerging threat on our risk map. As an organisation, our company keeps track of health warnings and guidelines issued by the World Health Organization, and issued communications, guidelines and health advice to staff as required. There is also a dedicated infectious diseases taskforce to handle the situation and coordination with staff. Risk managers work with the relevant stakeholders and ‘owners’ to ensure they are plugged into the picture and to capture risks involved,” he said.
“Financial sustainability of a company, health and safety of customers and staff, job security of staff, business plans and projections, are the core exposures brought by the crisis. All will have to be closely monitored in order to formulate appropriate actions and adjustments ahead in a timely and pre-emptive manner,” added the Parima board member.
The insurance market reacted rapidly to the threat of exposure to the pandemic risk in Hong Kong as elsewhere in the world, noted the risk manager.
“The insurance sector reacted very quickly with no cover for the communicable disease, or removed that cover at renewal. I think to make the current products in the market that cover pandemics more affordable and practical for clients, more work is needed. Brokers could explain what cover their client is entitled to under the policy and what is the insurance market trend. I would like to see some stated owned cover or a regional solution for pandemics,” he said.