The International Underwriting Association (“IUA“) announced earlier this week that it is supporting calls to devise a government supported insurance solution for future pandemic events, known as “Pandemic Re”.
Pandemic Re was first launched as a steering group in April following criticism regarding how the insurance sector has responded to claims arising from the Coronavirus crisis. A project committee has now formed with six working groups. More than 50 industry representatives have been appointed to the Pandemic Re working groups, including MP Amber Rudd who will lead the legal, regulatory and government affairs working group. Lloyd’s of London has also agreed to provide resources to two of the working groups.
Stephen Caitlin, chair of the Pandemic Re steering group explained that “The insurance industry needs to be on the front foot in the current situation, paying claims quickly…we need to find an inustry solution for future pandemics and this group has many years of combined industry experience.”
IUA stated that it has been following discussions regarding different possible approaches to providing cover for future losses from pandemic risks. On Monday, IUA chief executive Dave Matcham said “I am pleased that Pandemic Re has been able to gain support for its work… [m]any IUA members are represented in the working groups that are being formed to examine different aspects of the issue.” Mr Matcham also confirmed that IUA will provide any additional support needed and that it is committed to finding effective recovery solutions.
Pandemic Re is working with UK state-backed terrorism mutual, “Pool Re”. Pool Re was set up in 1993 in the wake of the Provisional IRA’s bombing campaign in the 1990s which led to insurers withdrawing cover for terrorism-related damage. Pool Re will provide structural recommendations to Pandemic Re.
A separate reinsurance initiative named “Recover Re” is also being considered by Lloyd’s which would offer after the event cover for pandemic related business recovery.