Yesterday, Bloomberg published an article on the prospects of a government-backed pandemic insurance program, providing an overview of what stakeholders around the world are doing to advance this conversation. This timely piece highlights the importance of finding such a solution, as many businesses—especially small ones—continue to face economic strains during these challenging times.
Key takeaways from this article include:
- Forcing insurers to cover pandemic-related business income losses would threaten the solvency of the insurance industry. "At the core is the reality that the global non-life insurance industry’s $2 trillion in capital won’t last in a 'black swan' event, such as a cyber attack or another pandemic, that hobbles the global economy."
- Given the scale of a pandemic, only the government has the financial capacity to cover such a risk, as insurers brace for greater climate change risks. "Anything as large as pandemic risk, the industry argues, will need government support. The coronavirus has shut down global economies in a way that very few prepared for, with revenue for millions of businesses cut or totally lost as they were forced to shut their doors. But it’s far from the only possible threat."
- Stakeholders—including policymakers and stakeholders—have been pushing for governmental action through policy proposals. "Lawmakers in the U.K., the European Union and the U.S. are grappling with ways for taxpayers to help in a more predictable way than hastily assembled bailouts. Insurance giants including Chubb Ltd., Axa SA and Lloyd’s of London are pushing for action before the lessons of 2020 fade."
If interested, the article can be found here. For more information and resources, go to fairinsure.org.