Read the text below, entitled “2005 – First Nine Months Results”, in order to answer question:

2005 – First Nine Months Results
Source: www.iii.org
Dec 27^th, 2005 (Adapted)

The property/casualty insurance industry reported a statutory rate of return on average surplus of 9.5 percent through the first nine months of 2005. The results were released by the Insurance Services Office (ISO) and the Property Casualty Insurers Association of America (PCI). The financial performance of the industry during the period featured a surprisingly low combined ratio of 100, a figure that provided stunning proof of the resilience of the property/casualty insurance industry in the face of record catastrophe losses approaching $50 billion.

Insurers also benefited from rising interest rates and modest stock market gains to generate $40.7 billion on their investment portfolio. Policyholder surplus also climbed by $20.4 or 5.2 percent, through the first nine months, again a surprise. Profi tability in the industry is still disappointingly low, however, coming in well below the expected 14 percent return for the benchmark Fortune 500 group of companies this year. Prior to Hurricane Katrina the industry was on a trajectory to record its highest level of profitability since 1987.

The text

Read the text below, which is entitled “Avian Influenza (Bird Flu)” in order to answer question:

Avian Infuenza (Bird Flu)
Source: www.iii.org
Dec 2005 (Adapted)

A current influenza outbreak, formally called H5N1 after two distinctive proteins on the flu virus, (but commonly referred to as bird or avian flu), has so far mainly affected birds. However, four countries – Thailand, Vietnam, Indonesia and Cambodia – have reported a total of 120 human cases of the H5N1 flu since 1997. These people are thought to have caught the disease by their contact with infected poultry. There has been no known human-to-human transmission of the virus.

Even if the H5N1 strain does not mutate to infect humans, the economic costs associated with avian flu strains could easily be in the billions if other countries, such as Mexico, impose bans on imported U.S. poultry and U.S. consumers avoid buying domestic poultry. Still, the economic costs are very different from the insurance costs.The following is an overview of two potential types of insurance coverages involved:

Workers Compensation: Workers involved in the handling of poultry could be at risk. Because such an exposure is work-related, workers compensation coverage would apply.

Tort-Related Exposures: If the infected poultry were found to have gotten into the food supply and people become ill as a result, litigation could ensue.

In paragraph 2, the author