Munich Re Specialty – Global Markets, Syndicate announced the launch of The Pandemic Consortium, a Lloyd’s market initiative which will be focused on offering parametrically triggered catastrophic communicable disease insurance.
The consortium will offer a proactive emerging risk transfer solution to mitigate against the impacts caused by pandemic and epidemic risks.
Many businesses are not covered against this risk in their insurance policies and face a protection gap without the solutions the consortium provides. This is despite modeling experts such as Metabiota (now called Ginkgo Bioworks) and Airfinity predicting a close to a one-in-three chance of another pandemic on the scale of COVID-19 within the next 10 years.
Coverage can be triggered by three objective data points:
- WHO report a new outbreak,
- WHO declare a public health emergency, and
- Civil authority restrictions are issued in relation to the disease within a covered area.
Munich Re said the consortium, based in London, will benefit from the experience and expertise of Munich Re’s Epidemic Risk Solutions unit (ERS).
The ERS unit, which has been writing risk since 2017 and is represented in London, Munich and Singapore, will provide expertise, aggregation guidance and underwriting rigor to the new consortium, allowing consortium partners to offer a collaborative solution for potential catastrophic outbreaks in future, Munich Re said.
“While COVID-19 remains a vivid memory for many, the risk of future pandemics and epidemics globally remains high. This innovative insurance solution, developed with the support of our partners, is designed to help businesses better prepare for and respond to these risks,” commented Dominick Hoare, group chief underwriting officer, Munich Re Specialty – Global Markets, in a statement.
“Its transparent triggers and rapid payouts once these triggers are met demonstrate how the insurance industry can proactively deliver effective solutions to help the economy stay on track amidst public health disruptions,” Hoare added.
As well as providing protection for businesses, The Pandemic Consortium will also be relevant at a national level. The recently published report by the G20 High Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response, recommends significantly expanding business interruption insurance to improve economic stability and free up government resources for pandemic preparedness and response.
“The Munich Re ERS team is proud to support The Pandemic Consortium with our longstanding expertise and knowledge in epidemic and pandemic risk,” according to Dr. Gunther Kraut, global head of Epidemic Risk Solutions, Munich Re, in a statement. “Expanding the reach and distribution of this expertise through the Syndicate’s consortium partners will help businesses better plan and prepare for future risks – while at the same time enabling a sustainable approach to managing aggregate capacity for this challenging risk.”
Topics
Excess Surplus
New Markets
Lloyd’s
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