In fact, some experts say that the economic impact of SARS is already equal to that of a terrorist attack or a severe natural disaster such as a hurricane or a major earthquake.
BusinessWeek online reported:
Many people have said SARS is to Hong Kong what September 11 was to New York-a sudden, unexpected event causing death and economic paralysis. While the sheer number of deaths is nowhere near September 11's toll, the economic impact is all too similar.
SARS has also severely impacted Singapore's economy, reducing GDP growth by at least 3 percent. It limited travel to Toronto and alarmed businesses in the United States and abroad. With its potential to shut down manufacturing plants, temporarily ban workers from their job sites, or severely disrupt supply chains, SARS could touch virtually any company in any industry.
Alarmed by SARS, business executives are asking:
- How can I anticipate SARS-related business risks that could impact my company's objectives?
- How can I prepare my business to effectively respond to the SARS threat and minimize its impact?
- What should I do if one of my employees contracts SARS or is exposed to the virus?
- How can I keep my business operating if SARS affects one of my employees?
- How can I manage a SARS-related disruption to my supply chain?
- What can I do to assure customers, employees, and suppliers that my company can manage the impact of SARS?
- Do my property and casualty policies cover me if I have a claim?
- How much will SARS cost me and how can I mitigate the expense?
"One month after first hitting the headlines, the economic damage from SARS has spread well beyond airlines, hotels and conferences to virtually all businesses within [Asia], and many well beyond. It is now crimping communications, endangering supply lines, and potentially depressing demand from consumers. For western firms in a range of industries — from clothing to toys to microchips — Asia is their center of production. SARS threatens to reduce product quality, delay new ranges and, if production is forced to move, raise labor costs."
The Economist, April 17, 2003
To answer these questions, consider the following services that can minimize the impact of SARS and help protect your business:
Business Risk Consulting — Identify, prioritize, and assess the critical business risks across the enterprise to ensure an effective corporate-wide plan to proactively manage the potential consequences of SARS.
Business Continuity Management — Identify risks, quantify their potential impact, and develop recovery and restoration strategies to help ensure business continuity in the event of a SARS outbreak.
Employee Absence Management — Develop a telecommuting plan or other employee productivity programs that can be implemented if work sites are closed or quarantined.
Supply Chain Risk Consulting — Identify critical risks that impact your ability to produce or deliver products to customers and develop strategies to help minimize, transfer, or eliminate potential supply chain disruptions.
Emergency Response Planning — Prepare to effectively respond to SARS-related threats by assessing their potential impact and developing policies and procedures for site-level responses.
Strategic Risk Communications — Provide timely and appropriate information to reassure different audiences-including employees, shareholders, clients, analysts, the media, vendors, and the public-that you are effectively managing SARS-related challenges.
Claims Consulting — Review your property and casualty insurance policies and discuss the potential for recovery of major direct or indirect losses; develop a plan for handling self-insured disability and third-party claims.
Forensic Accounting — Assess the economic exposure to your business and evaluate the benefits of mitigation strategies.
With SARS still spreading, the time to act is now-before it becomes an emergency and responses must be developed in haste. Marsh can work with you to determine your potential exposures and develop the appropriate measures to help mitigate the risks. By taking the necessary steps early on, you can reassure shareholders, customers, and the board of directors that your business is prepared to respond if SARS affects your people, business, or operations. With a wealth of experience helping global organizations to manage all types of risks, Marsh is the right partner to help you meet SARS-related challenges.
"SARS is a terrible killer. It raises the risk of a failed recovery. It is not easily vaccinated by the Fed, nor fiscal stimulus, nor tax cuts. We hope it is short-lived and doesn't become a big issue."
David Kotok, Chief Investment Officer, Cumberland Advisors, CNN/Money
If you have any questions or would like additional information, please contact us.
