With the U.S. Centers for Disease Control and Prevention confirming cases of swine influenza New York, Ohio, Kansas, Texas and California, doctors and public health officials have much work to do to contain a possible pandemic.

While insurers in many lines of business will have to be vigilant, few will be affected more directly than providers of farm insurance, as the disease tends to occur in people who work in close contact with pigs.

Although for now the confirmed number of cases of the flu remains small, if, as feared, the virus mutates, enabling it to be spread from human to human, the implications for the insurance industry broadens. Health insurers will need to account for a spike in the demand for antiviral medications such as Tamiflu. More grimly, extrapolating further, life insurers will need to account for the fact that the disease tends to kill mainly younger people.

While some may take solace in the fact that the avain flu, which ravaged Asia a few years ago, failed to make the leap to human to human transmissions, insurers can not afford to assume the same thing will happen this time around.

“The world was expecting a bird flu pandemic to originate in South East Asia and was lulled into a false sense of security by the difficulties in transmission from birds to man,” notes Alex Hindson, head of enterprise risk management at Aon Global Risk Consulting.

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