Insurers can help world recover from Covid

Lloyd’s, the world’s insurance and reinsurance market, says there are a number of ways the insurance industry could fast-track global economic and societal recovery from the far-reaching impacts of Covid-19.

These include three open source frameworks, that help build future resilience through innovative partnerships and products together with a Centre of Excellence to better understand, model and provide insurance for systemic catastrophic events.

Following interviews with executives and experts across key global industries, the proposals seek to address short, medium and long-term challenges customers face as they begin to recover and reopen. The proposals include solutions for the reopening of businesses against the threat of further waves of Covid-19, building greater resilience across global supply chains as well as the digital economy, and preparation and protection for the next systemic catastrophic event.

As the Covid-19 pandemic continues to devastate economies and communities, with impacts requiring resources that can only be accessed by governments, there remains an urgent need to protect society as it recovers and prepares for an uncertain future, Lloyd’s said.

ReStart, a potential non-damage business interruption solution (loss of revenue without a physical damage trigger) for future waves of Covid-19 being developed by the Lloyd’s market, specifically focuses on supporting SMEs.

The solution is focused on giving certainty of non-damage business interruption coverage initially to UK SMEs by pooling limited capacity across a number of Lloyd’s market participants. The product would support SMEs reopening, offering a range of limits that ensure it is affordable for customers, without requiring any government support.

Recover Re sets out a proposed “after the event” insurance product framework, that could provide immediate relief and cover for nondamage business interruption over the long-term, including the current Covid-19 pandemic. If implemented, this could be an efficient way to inject commercial and government funds into the economy, providing relief to customers with limited borrowing capacity. This framework could be implemented in any country where the government has the resources and industry commitment to support it.

Black Swan Re is a reinsurance framework for government and industry partnership that could better protect customers from the devastating and long-term impacts of systemic catastrophic events – from another pandemic, or global supply chain disruption, to the interruption of critical infrastructure or utilities. The framework