Swine Flu Scare Latest Worry For Insurance Sector
The World Health Organization has already raised it’s alert level in response to a swine flu outbreak in Mexico and which already has cases popping up around the world. Fear of a pandemic is the latest worry for an insurance sector that has already been battered during the current financial crisis.
Depending on the scope of the outbreak, the insurance industry could see significant losses mount up across many different sectors. The more obvious are the life and health care sectors but depending on how much the health scare disrupts economic activity, other insurers could be affected as well.
Health alerts are not new, the most recent public health scares being SARS and the avian flu. The big difference however was that the other two didn’t occur while the world was going through the worst recession in decades.
Obviously this isn’t something the industry needs right now, with many companies just struggling to survive. Although if it does turn out to be a major outbreak, the federal government will likely offer some financial assistance, something that isn’t exactly forthcoming at the moment for those companies not named AIG.
We’ve already seen the state of Texas shut down high school sporting events for the next week until the scope of the outbreak can be fully realized. If there are severe business disruptions to follow, many insurers could be severely impacted as well. Hopefully though, the outbreak will be contained and economic impacts will be minimal but it will likely be a few weeks until we know for sure.
