The ‘cancellation culture’ caused by Covid-19 is hitting the economy hard, but the inability for event organisers to obtain to coronavirus cover is still stifling this sector – Blanc believes it’s time for the insurance industry to lean on the government for a solution
Aston Lark group chief executive Peter Blanc has declared that “Pandemic Re needs to get up and running” in order to mitigate the detrimental economic impact of the coronavirus crisis on the events sector, as organisers struggle to secure insurance coverage for Covid-19.
Speaking exclusively to Insurance Times, Blanc said the UK is currently in the grip of “a complete cancellation culture, where everything’s continually being cancelled and no-one can actually take the risk of arranging anything now because they can’t buy insurance against Covid”.
Although many other sectors, such as retail and hospitality, have been able to re-start operations as government restrictions have been eased, the events sector is still dragging its feet due to the “huge amount of upfront costs that goes into these events” juxtaposed with the potential threat of further localised lockdowns and the possibility of stricter measures being reintroduced – this makes event planning particularly perilous.
Blanc said that this situation is not beneficial for the economy and that “Pandemic Re needs to get up and running” so that there is “a solution going forward”.
He continued: “There is just a huge amount of upfront costs that goes into these events and, up until now, you used to be able to buy cancellation, curtailment insurance against all that sort of exposure. Right now, if you were arranging an event for next summer, it still feels like toss of a coin as to whether it can happen or not and you can’t buy insurance against that cancellation, so people are just going to err on the side of caution and not arrange anything.
“As a country, that’s not great and it would be really helpful if the government and/or the insurance industry, or a combination of the two can actually start coming up with some solutions – that’s what insurance is for, to enable business to take risk. And businesses have got to be able to take risk and they’ve got to know that they can do it and be protected.
“The reaction of insurers in removing Covid from public liability policies, that really does not help. How can you run a care home next year and not have PL cover for Covid? It’s a great opportunity for insurance to prove it’s worth, but obviously insurance is not a charity. And right now, the situation does feel so fragile as far as cancellation is concerned, but I wonder whether we can lean on the government – without cancellation cover, no event is going to happen. No-one’s going to book exhibitions, no-one’s going to book conferences, no-one’s going to book any significant leisure event and that’s a huge gap to the economy.
“The government needs to step in and say ‘right, we’re going to provide cancellation cover for events if they do get cancelled by Covid’. I think that would be incredibly helpful and a way forward.”
Insurance taking the lead
For Blanc, “the insurance professionals ought to be the ones actually mentioning this to the government”.
He added that the initiative may not cost as much as the government may fear.
“It would be a damn sight cheaper than furlough and potentially might be free of charge. They could offer the guarantee, they might never have to pay out on it – if a vaccine has been found in time, if the rules have been relaxed, then it might never, ever pay out,” he said.
“It strikes me as being a pretty cheap thing for the government to offer, but it could really get the economy moving.”
Following the models of Pool Re and Flood Re, Pandemic Re has been proposed as a collaborative solution to future pandemics that is supported by both the insurance industry and the government.
There is also the Pandemic Re Steering Group, which first met in April – this body, chaired by Stephen Catlin, chairman and chief executive at Convex, aims to formulate the insurance industry’s response to the current Covid-19 outbreak, as well as improve responses to future pandemics.
The group also includes industry heavyweights such as Jon Dye, chairman of the ABI and chief executive at Allianz Insurance, Stephen Hester, chief executive at RSA, Nick Frankland, UK chief executive for reinsurance solutions at Aon and James Nash, chief executive, international at Guy Carpenter, to name a few.