Insurance against pandemic risk: options for shared resilience solutions in the EU
- Published: Tuesday, 28 July 2020 07:51
The European Insurance and Occupational Pensions Authority (EIOPA) has published an Issues Paper highlighting options for developing shared resilience solutions for pandemic risk. The paper recognises that private insurance solutions alone will not be sufficient to protect against the financial consequences of future pandemics. Solutions will require both public and private sector involvement, and build on the following four key elements:
- Proper risk assessment
- Risk prevention and adaptation measures
- Appropriate product design
- Risk transfer.
The options include different insurance models and coverage, for example whether cover should be mandatory, and whether payouts should be based on a pre-agreed parameter or index. The options also include different ways the public and private sectors could work together, for example establishing an EU-expert group for data sharing and risk modelling, and creating a platform for public and private coordination on prevention measures. Different potential roles are considered for how the European Union can contribute towards solutions.
As a next step, the scope of the shared resilience framework could be expanded to consider further resilience gaps stemming from systemic cyber, climate change impacts in natural catastrophes and terrorism.