Lloyd’s of London proposes to insure NHS for unexpected costs

Lloyd’s of London has proposed to ink a deal with the UK government to insure the NHS for unexpected cost increases triggered by events such as another pandemic, according to a report published yesterday (16 April 2023).

The Guardian has reported that Lloyd’s chief executive John Neal suggested the possibility of a bespoke insurance contract for the health service to Chancellor Jeremy Hunt in March 2023.

Lloyd’s chairman Bruce Carnegie-Brown was quoted in the report as saying that “one of the challenges the government has is around peak demand in the NHS relative to NHS budgets”.

“If we can provide an insurance solution that effectively funded the NHS if it breaches its capacity, or budget issues, then it would show the insurance industry responding in a positive way to something that was caused by an exogenous event,” he added.

A Lloyd’s spokesperson told Insurance Times: “We’ll continue to work with public and private sectors to discuss the value insurance can add to protecting against risk.”

Important role 

The NHS is publicly funded – Carnegie-Brown said that it had historically been difficult to encourage the government to partner with the private sector due to a “level of mistrust on both sides”.

However, he claimed the government had been receptive to the proposal, adding: “We’re glad that they are listening and open to exploring the opportunity.”

A government spokesperson said: “While we appreciate the important role the insurance sector plays in building resilience to future risks, it generally does not represent good value for money for central government to purchase commercial insurance.

“The government is committed to strengthening our own systems and capabilities that support our collective resilience against systemic risks.”