Risk managers turn attention to Ebola threat as disruption grows

Last week UN officials warned that no country was safe from the Ebola outbreak. So far the virus has infected over 8,400 people, killing more than 4,000 people in Liberia, Sierra Leone, Guinea and Nigeria. The World Health Organisation (WHO) said this week that the death rate of the Ebola outbreak is up to 70% and warned there could be as many as 10,000 new cases a week two months down the line if appropriate measures are not taken to tackle the virus. There have now been travel-related cases recorded in the US, while a nurse in Spain last week became the first person to contract the disease outside of Africa and a UN employee infected with Ebola died in Germany on Tuesday. The spread of Ebola has prompted governments in Europe and the US to take action at home. US and UK airports have begun screening passengers arriving from west Africa for Ebola, while seaports in the US, Brazil and Argentina are checking shipping crews arriving from the region.hideThe spiralling Ebola crisis poses a critical threat to business continuity in Africa, according to a report published last week from risk consultant Maplecroft. The outbreak is already impacting economic growth in the region by disrupting trade and transport, according to Dr Charles Laurie, Head of Africa at Maplecroft. According to the World Bank, if authorities fail to contain the outbreak Ebola could cost affected countries in Africa as much as $32.6bn by the end of 2015. Companies with people, suppliers and customers in west Africa are already being directly affected, according to Richard Waterer, Head of Marsh Risk Consulting. However, the outbreak is also affecting business beyond the region-as far away as South Africa-as consumer confidence in the wider area is dented. Indirectly, business in countries with links to infected areas can also suffer. For example, the oil sector in Nigeria and the cocoa industry in Ivory Coast and Ghana. Companies are growing more aware of the potential implications of the ongoing Ebola outbreak in west Africa, especially those in affected countries and sectors like travel and tourism, said Mr Waterer. "Companies are concerned whether the outbreak will escalate and are asking their risk managers to respond," he said. "We see more enquiries on this issue from risk managers who are asking for information on the threat profile and insurance coverage issues," he said. "Risk managers are looking to get their arms around any potential exposures from the Ebola outbreak, accessing sensible information to monitor the situation," said Mr Waterer. Risk managers should consider any potential business interruption implications from Ebola, including within the extended supply chain, because suppliers of suppliers may be affected, Mr Waterer said. Companies that import commodities from the west African region may want to plan for alternative supply sources, he added. Agriculture, manufacturing and tourism are being hit hardest, especially in the worst affected countries of Liberia, Sierra Leone and Guinea, explained Dr Laurie. However, there is also a ripple effect with the closure of some trade routes and a general reluctance to engage in trade, he said. Imports and exports have been affected as ships avoid ports in some infected countries and because of disruption to the region's major transportation corridors, according to Maplecroft's Dr Laurie. Some airlines have stopped flying to affected countries while huge sways of Sierra Leone have been in lock-down. Fears for disruption to exports like cocoa has caused price volatility in commodity markets, while the price of food in domestic markets has also risen sharply. "There are extensive levels of caution and fear among the population," said Dr Laurie. "Given that trade is very interconnected in the region there will be a severe slowdown in trade and business activity." Multinational companies in west Africa have also been affected by the disruption to transport infrastructure, labour shortages and an exodus of foreign workers from infected countries. For example, Ebola restrictions and the withdrawal of ex-pat employees have put some iron ore, gold and aluminium producers under pressure, forcing some mines to temporarily close. ExxonMobil recently postponed operations off the coast of Liberia. "The problems in getting people to work in infected areas and the lack of transport is creating uncertainty for business," said Dr Laurie. Governments are finding it difficult to cope with the outbreak, and the crisis continues to grow, said Dr Laurie. While the number of cases will increase, the outbreak is likely to remain contained in western countries, he predicted. In addition to short-term disruption, there will also be long-term implications for the region from the Ebola outbreak, according to Dr Laurie. For example, the numbers of infected healthcare and education workers is high, putting these public services under increasing pressure. The Ebola outbreak highlights just how interconnected the world has become, according to Dr Laurie. "What could be seen as an issue for remote parts of west Africa can quickly become global and affect trade and commodities in and out of the region," he said. "A key lesson from the outbreak is that there is no such thing as an isolated disease outbreak-they very quickly become global," he said. This Ebola outbreak is a 'stark reminder' that it pays to spend time on building disaster resilience and testing the impact of different scenarios, according to Mr Waterer. "Too often boards concern themselves with static risk registers, but they should also take a step back and consider bigger issues like a disease outbreak and look at the broader social and political impact," he said.

Risk managers turn attention to Ebola threat as disruption grows

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