A
film industry group representing companies responsible for award winners such as The Hurt Locker and the Lord of the Rings trilogy is among organisations taking up the cudgels over insurance coverage during pandemics. The Independent Film and Television Alliance (IFTA) includes firms outside the studio system that have produced 70% of Academy Award Best Pictures over the past three decades. But without diseases cover financing is not available and productions come to a halt. “The United States has already seen a loss of films this year in the neighbourhood of 250-400 that have not been produced that normally would have been,” IFTA Chief Executive Jean Prewitt told a video roundtable last month. “Production cannot happen without insurance against communicable diseases, which was always available in the past, but which since March has been explicitly excluded from all of our companies’ production insurance policies.” IFTA is among groups throwing their weight behind the proposed Pandemic Risk Insurance Act (PRIA) championed by New York Congresswoman Carolyn Maloney, who hosted the video roundtable. The Act would provide a public-private partnership
28
insuranceNEWS
October/November 2020
response similar to arrangements in place for terrorism, reflecting the reality that pandemic business interruption risks are beyond the capacity of the insurance sector to take on alone. The concept has support from Marsh & McLennan Companies and the Risk and Insurance Management Society (RIMS), while the roundtable also included proponents of alternative plans involving government backing. Chubb, which participated in the event, has proposed a two-tiered approach, with government taking on the lion’s share of the risk. Its model includes parametric cover to speed funds to the small end of the market and a separate public-private model for larger enterprises. Similar discussions are well underway in Europe and the United Kingdom, where the terrorism-focused Pool Re is suggested as a model for a new Pandemic Re. Respected insurance veteran Stephen Catlin, who has raised concerns over reputational damage to the industry from COVID-19, is chairing a steering group to develop possible solutions. Lloyd’s has also distributed a white paper in global markets which outlines three models, labelled ReStart, Recover Re and Black Swan Re, to deal with immediate and long-term challenges from events such as COVID-19.
