Businesses see the coronavirus as a new threat, but planning for uncertainty is part of the playbook for Hartford firms

Businesses are not necessarily wading into unknown territory as they look for ways to confront the spreading coronavirus.

Travelers Cos. Inc. has business continuity plans in place that were used in extreme weather events such as hurricanes and nor’easters, allowing employees to work from home, the Hartford- and New York-based insurer said Monday. Travel to China, Hong Kong and South Korea has been restricted, a policy common among many companies and universities as the respiratory illness affects populations on nearly every continent.

A spokesman said The Hartford has “business continuity protocols for a variety of crises” as part of its usual business resiliency plans.

"These plans are being actively reviewed and updated for various potential scenarios,” spokesman Matthew Sturdevant said.

Voya Financial Inc. said it allows work from home technology and call-center staffing to “minimize exposure and risk” to employees, customers and others.

Dan Erickson, vice president of insurance research at Conning, a global investment management firm in Hartford, said compared with previous epidemics such as the Middle East Respiratory Syndrome and Severe Acute Respiratory Syndrome, the coronavirus fatality rate is much lower at 2% to 3%, though “still substantially more than the flu.”

Fatality rates with the other two illnesses were in the double digits, he said.

“It’s very early to see any claim activity on the part of insurers,” he said. “It’s pretty nominal exposure.”

A greater exposure for insurers is to pay out for event cancellations, said Steven W. Webersen, head of research at Conning, citing an increasingly common response to the virus. Insurers have yet to advise investors of lower profit and revenue expectations, he said.

The industry is taking a “risk management approach as it would other risks,” he said.

Amphenol Corp., a Wallingford manufacturer of electrical, electronic and fiber optic connectors and interconnect systems, antennas and other equipment announced last week it does not expect to meet its first quarter sales and profit guidance provided on Jan. 22.

“Given the uncertainty around the timing of a return to full production in China and the lack of visibility with respect to demand from customers in China, among other factors, the company is currently unable to quantify the full impact of COVID-19,” it said.

It will provide additional information on its next earnings call set for April 22.

Matthew Daly, head of corporate and municipal teams at Conning, said a “huge spike in volatility” has been a key factor in economic disruption. Pledges by the Federal Reserve and central banks in other nations to intervene by cutting interest rates have had their desired effect, he said.

“Some hope we’ll see more coordinated action by the central bank for economic growth and monetary easing,” Daly said.

Travel insurance, business insurance and life insurance are most likely to feel the full impact of the coronavirus, according to the Insurance Information Institute, an industry group. Supply chain disruptions and employee absenteeism at vendors and suppliers in China, for example, could reduce productivity and efficiency for businesses worldwide, it said.

In response, business income insurance covers a business owner for lost profit and fixed expenses when a business must stay closed. Policies may include communicable or infectious diseases.

Specialized insurance policies and extensions of coverage added to standard property insurance policies, including those sold in the hospitality and health care industries, may provide insurance coverage for losses caused by “communicable or infectious diseases” without requiring physical damage to insured property.

Another form of insurance is “contingent business interruption” and the supply chain. Chinese manufacturers and related businesses have been hit by factory shutdowns required by the government and are likely to affect supply chain operations and industrial production in China across automotive, pharmaceutical, medical and high-tech manufacturing industries that could have an impact on U.S. businesses.

The Insurance Information Institute said policies have had exclusions added in the last 10 years as insurers grappled with flu-type outbreaks. So-called parametric policies, which are a metric or index that can see the presence of a pathogen, are becoming increasingly attractive to insurers of business risks related to pandemics, the industry group said.

Stephen Singer can be reached at ssinger@courant.com.

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