World Struggles to Deal with Deadly SARS Virus

According to the World Health Organization more than 4000 cases of Severe Acute Respiratory Syndrome (SARS) have so far been reported, and more than 250 people have died from the infection. If anything those statistics are conservative.

The Chinese government has been reticent about releasing reports on the effects of the deadly disease in the People’s Republic, but has now gone on the offensive against it. Global news reports show Chinese citizens lining up to acquire face masks and other remedies against the disease. But it may be too little too late.

The Chinese Insurance Regulatory Commission has sent out rather mixed signals on how it expects the country’s insurers to handle SARS related claims. The CIRC issued a bulletin saying that it expected insurers to honor life and health claims, as the disease, being newly discovered, is not included in a list of specifically excluded coverages. Most insurers have said they would honor such claims, but the CIRC went further, and told the companies that they could not specifically advertise coverage for SARS.

While China and Hong Kong have been hit hardest by the disease, its fallout is being felt around the world. Toronto officials were outraged when the WHO put the city on its list of places to be avoided due to the outbreak there, which has already killed 15 people. The World Bank cut its prediction for expansion in East Asia this year to 5 percent from 5.8 percent due to the anticipated adverse economic consequences form SARS.

Closer to home, AIG mentioned the possible fallout from SARS in its first quarter economic report. The company, which generates around 30 percent of its gross revenues from its Asian operations, said SARS had not had an impact on the Q1 results. It noted, however, that “SARS may impede agents from freely visiting prospects and will likely have some dampening effect on new sales in certain Asian markets in the second quarter. As a result, we have increased our direct marketing efforts including telephone marketing. There is growing demand for some of AIG’s traditional policyholder protection and critical illness products. We expect the outbreak of SARS to have only a slight impact on profitability.”

The world’s airlines have cut back flights, especially to Asia, as a result of falling demand – a situation which is likely to worsen, as insurers have begun to exclude coverage for SARS. According to a report in the U.K.’s Guardian newspaper American Express warned prospective British travelers that its travel policies would not cover trips to areas the government has issued warnings on, which includes Canada, as well as China and Hong Kong. Direct Line, another U.K. insurer has reportedly taken a similar stance.

At least one U.S. insurer, however, has tried to assure travelers. InsureMyTrip.com., a leading provider of travel coverage, reported “a tremendous surge in call volume, sales and related activity” in-light of the ongoing SARS threat, from people who “all want to know what protection is afforded to them if they do indeed become ill from SARS.”

InsureMyTrip President Jim Grace confirmed that “These policies provide both medical coverage as well as medical evacuation protection in the event of an illness or accident while traveling. These are important coverages given the current risks in traveling both domestically and abroad.”

The company’s announcement indicated that, even though coverage may have been secured to affected areas, many travelers had elected to “postpone their trips to some of the hardest hit areas,” according to John Cook, head of InsureMyTrip’s Call Center. The policies can take care of that too. “One of the nice features of these policies is that the insurance companies do allow travelers to change their dates of travel prior to departure. This flexibility has been most welcome during this difficult time,” Cook added.

“Travelers detained by countries that have issued mandatory quarantines would be covered under the trip interruption portion of most travel insurance policies. Voluntary quarantines would not be covered,”said the bulletin.

“The fear of SARS and the travel warnings issued by the WHO and the US Department of State are of increasing concern for all travelers worldwide. Although cancellation of the trip would not be covered under the trip cancellation portion of a travel insurance policy, there are many meaningful benefits that travel insurance can and is providing for travelers,” it concluded.