UK Risk and Insurance Group Backs Lloyd's Pandemic Coverage Proposal
July 07, 2020
Airmic, the UK association for risk and insurance professionals, has voiced support for a framework Lloyd's of London released last week for covering business interruption caused by the COVID-19 pandemic and losses from future pandemics and systemic catastrophes.
In a statement, Airmic said, "Lloyd's proposals address the fact that businesses are facing very acute and immediate challenges from the impact of the global pandemic while also considering the medium and long-term insurance challenges that the pandemic has exposed.
"We are very much at the beginning of the crisis, and businesses need practical support and insurance solutions for potential future waves and unexpected consequences of this virus, and Lloyd's has shown leadership in proposing practical solutions," the statement said.
Airmic said it welcomed the fact that the proposed Lloyd's framework looks beyond the current pandemic and addresses the need to find a way to cope with the impact of future systemic catastrophic events.
"The proposed solutions are the product of broad thinking and extensive consultation with Lloyd's customers, including those represented by Airmic, the insurance market, and government," Airmic said. "This collaboration is welcomed as it is vital during such a far-reaching crisis. Only by working together will we emerge from the pandemic stronger, and Airmic is looking forward to working with Lloyd's in turning this into a reality."
The Lloyd's proposals, which were outlined in a report titled "Supporting Global Recovery and Resilience for Our Customers and Economies: The Insurance Response to COVID-19," focused on potential solutions for business interruptions resulting from government-ordered shutdowns to pandemics or other crises. They include three open-source frameworks for addressing systemic catastrophic events.
Lloyd's said that if implemented, the three frameworks—ReStart, Recover Re, and Black Swan Re—could provide buyers protection from further waves of COVID-19 and other future pandemics and strengthen societal resilience against future systemic catastrophic events.
Recover Re and Black Swan Re would both require government/(re)insurance industry partnerships.
July 07, 2020