RIMS Calls for Creation of Federal Pandemic Risk Insurance Program
April 21, 2020
The Risk and Insurance Management Society (RIMS) has urged Congress, the US Treasury Department, and President Trump to create a pandemic risk insurance program to accelerate the country's economic recovery.
In a letter Monday to congressional leaders, signed by RIMS President Laura Langone, RIMS said that a pandemic risk insurance program would increase access to capital from lenders and establish a viable insurance market with sufficient, affordable capacity for future pandemics.
Such a program would also create certainty for businesses and organizations of all sizes across the United States and ensure that businesses can meet future pandemic events with greater resilience, RIMS said.
"We surveyed our members and found that over 66 percent will have direct business interruption losses as a result of COVID-19," the letter said. "More specifically, our survey showed that 77 percent expect the losses to be over $1 million, and 36 percent estimate losses to be more than $25 million."
In a statement, RIMS said that its survey also found that 91 percent of the risk professionals surveyed support a Terrorism Risk Insurance Act–type federal loss-sharing program for insurance claims relating to losses resulting from a pandemic or epidemic.
"We strongly believe that mitigating the initial financial shock of a pandemic will reduce the compounding effects of uncertainty on the economy," RIMS' letter said. "A pandemic risk insurance program will help rebuild confidence and security for our businesses, which is a critical first step to recovery."
RIMS called on risk professionals to support the effort by contacting their local member of Congress.
April 21, 2020