London — When much of the global economy locked down last year, insurers, facing estimated losses of more than $100bn globally, reached straight for their red pens to strike pandemic cover from all new business policies.
The company, which declined to name its clients, said its insurance policy has enabled 19 independent film and TV productions with budgets of between $1 and $85m to film at locations globally. “Our modelling does capture infections and mortality,” said Robert Muir-Wood, chief research officer at risk modelling firm RMS.
“A year ago, on the non-life side we had essentially no pandemic modelling skills,” said Iwan Stalder, head of accumulation management at insurer Zurich, who has since been engaged in broader scenario modelling for pandemics. Another way to cover Covid-19 could be to repackage pandemic risk as debt through so-called insurance-linked securities , sharing that risk with investors such as pension funds.
“If you put a boundary around it, you can price the risk,” said Greg Medcraft, the Organisation for Economic Co-operation and Development’s director for financial and enterprise affairs.
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Underwriters face conundrum in making pandemics insurable againHuge demand is causing companies to figure out how they can put affordable risk cover back in policies
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