SARS hits Asia-Pacific economies. (Briefing).

The appearance of a dangerous, pneumonia-like virus in several Asia-Pacific countries, and its subsequent spread to other continents, has global health authorities scrambling to both identify and contain the threat.

The disease's potential impact on insurers is uncertain, but most industry observers believe it won't be catastrophic.

Severe acute respiratory syndrome, or SARS, has stricken about 3,293 people, most of them in southern China, since last November, according to information released April 17 by the World Health Organization. WHO said 161 deaths have been attributed to the flu-like illness, most of those in Hong Kong and China.

Mainland China reported 1,432 cases, with 64 deaths as of April 16, followed by Hong Kong, with 1,268 cases and 61 deaths. Singapore reported 162 cases and 13 deaths. Cases had turned up in 22 countries and territories, according to WHO.

So far, SARS mostly has impacted the travel and tourism industries in the Asia-Pacific region, but some business closings and quarantines of workers have been reported in Singapore and Hong Kong, raising questions about whether business interruption and workers' compensation insurance, among other lines, might be affected.

Dutch financial-services giant ING Group N.V., which has extensive life insurance operations in the Asia-Pacific region, said it expects the SARS outbreak to have a "short-lived effect" on Hong Kong's economy as it's brought under control by June. In a research report called "SARS Impact--Don't Panic," ING Financial Markets' head of Hong Kong and China research, Kingston Lee, wrote that SARS is a "one-off event which is likely to end in May/June, and the overall impact on the Hang Seng (Hong Kong) Index earnings will be minimal."

Among published estimates of the disease's economic impact are the following: French investment bank BNP Paribas Peregrine lowered its 2003 economic growth forecasts for several Asian countries by 0.4% to 1.5%; Morgan Stanley lowered its estimate of economic growth in Asia to 4.5% from 5.1%; and Goldman Sachs estimated that SARS could take 0.7% of Hong Kong's economic growth every quarter for as long as the problem continues.

Robert Hartwig, chief economist and senior vice president for the Insurance Information Institute, said he doesn't see any pressing insurance issues arising from SARS, at least for property/casualty insurers. "There's a lot of hype surrounding SARS right now, but it hasn't been an especially widespread epidemic at this point," he said. "I don't think it's something that will be extremely notable from an insurance point of view."

Hartwig said the business-interruption issue is probably a nonstarter, for several reasons. Typically, business-interruption claims are triggered by some sort of property damage or incapacity, such as damage to buildings. "You can't make business-interruption claims if there is no damage," he said.

RELATED ARTICLE: SARS Fact Box

* Origin: Guangdong province of China

* No. of reported cases: more than 3,293 (includes deaths as of April 17, 2003)

* No. of deaths: 161 (as of April 17, 2003)

* No. of countries reporting cases: 22 (as of April 17, 2003; including United States, Canada, Germany, United Kingdom, France and Brazil)

* How it is spread: Via droplets spread by coughing and sneezing and breathing them in

* Cause: Coronavirus (viruses with a halo-appearance when viewed under a microscope)

Sources: centers for Disease control; World Health Organization