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The Rough Notes Company Inc.



June 24
09:40 2020

Risk Management



Risk advisors can drive solutions to the challenges we face amid the pandemic

It’s been quite a ride since we were first impacted by COVID-19, and we are not out of the woods yet. Unfortunately, pandemics can last up to two years unless a vaccine is developed. They can also include waves of infections, so just about the time you might think you are through the worst, you get hit again, which could happen to us as we enter the next flu season in North America.

This is not the first pandemic and most likely not the last. We hear a lot about the 1918 Spanish flu that killed 675,000 in the United States, but only a few of us actually lived through it. A little closer to home, we suffered through the Asian flu in 1957 (the year I was born) that killed 116,000 Americans and lasted through 1958. I asked my mother if she remembered this, and she said she did. But she also recalled that everyone kept working with little disruption in the economy and daily life.

Finding a balance between medical and economic concerns is extremely difficult and is highly charged with emotion.

Then, in 1968, Hong Kong flu killed 100,000 in the United States. This was followed by the 2009 bird flu. At the time I warned employers that they needed a pandemic disaster response plan. Many took my advice and still have those plans in place today. The good news is that a vaccine was discovered quickly, and the death toll was held to 12,000 Americans.

Now we are in the grip of COVID-19, which originated in Wuhan, China. One thing that has changed this time around is the way our country responded. Right or wrong, never in the history of the United States did we shut down the economy to prevent the spread of a disease. Our response will be studied and debated for years to come. But was it the right response? Whenever I’m faced with a serious problem, I think, “remove the emotion and work the problem.” Let’s look at this through the prism of the five steps of risk management:

  1. Identify Risk. The risk is getting sick and dying from COVID-19, a virus that is invisible and appears to be highly contagious from person to person. There’s also the risk of severe damage to our economy as many nonessential workers are required to stay home to slow the spread, so hospitals are not overwhelmed with cases beyond their capacity—which in itself is another risk.
  2. Analyze Data. The problem with managing a new risk is a lack of data. All we have are models that predict in many areas of the country a lack of hospital capacity, personal protective equipment (PPE) like masks, and medical equipment such as ventilators and testing kits.
  3. Control Risk. A mitigation strategy was used that included for the first time in history “stay at home” emergency orders, as well as testing, social distancing, hand washing, and face covering.
  4. Finance Risk. What will we need to invest in to keep the population healthy and safe while keeping the economy going?
  5. Measure Results. How is our strategy working, and do we need to make any adjustments?

Some describe fighting COVID-19 like a war with battles being fought on two fronts. One is the medical battle and the other is the economic challenges. As of late May, more than 100,000 deaths and over 260,000 recoveries had been reported in the United States. Unemployment went from 4%, the lowest rate in decades, to over 14%, the highest since 1940, before dipping a bit. According to the U.S. Chamber of Commerce, 43% of small business owners believe they will not survive six months in current economic conditions. Even large, well-known brands like Neiman Marcus filed for bankruptcy, laying off over 14,000 employees.

Finding a balance between medical and economic concerns is extremely difficult and is highly charged with emotion.  Our first response is fear, so we double down on saving lives and curtail economic activity; that’s a single focus on one risk. Then we realize there is a tipping point, and we run the risk of doing more damage to our economy than we anticipated. It’s hard for us to rationalize why some workers are essential and others are not.

Some people can’t understand why they are locked down when they live in an area of the country or state that has few cases or deaths. No nonessential medical or surgical services are allowed, resulting in potentially poorer health outcomes and possibly unnecessary death, as well as financial harm to our healthcare system.

As we get more data, one might question if the strategies implemented were wise and if maybe adjustments are warranted. We have learned that this virus is deadliest to high-risk people or those who are older and may have underlying risk factors. Some areas of the country have a much more significant problem due to population size, like New York City and Detroit—and its surrounding counties—in my home state.

Navigating the balance between protecting lives and saving the economy is difficult, but we need to remove the emotion and work the problem. People are looking for leaders right now. As risk advisors, we are uniquely qualified and positioned to lead our clients through this minefield of risk.

The author

Randy Boss is a Certified Risk Architect at Ottawa Kent in Jenison, Michigan. As a Risk Architect, he designs, builds and implements risk management and insurance plans for middle market companies in the areas of safety, work comp, human resources, property/casualty and benefits. He has over 40 years experience and has been at Ottawa Kent for 38 years. He is the co-founder of, web apps for insurance agents to share with employers. Randy can be reached at

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