‘Share pandemic risk coverage’, urges Marsh chief exec

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Marsh boss calls for creative solutions to mitigate future pandemics and other shock events

Global broker Marsh is calling for a pandemic risk insurance programme where policyholders, insurers and governments share the risk of events such as Covid-19.

This was the message from Marsh’s president and chief executive, John Q Doyle at the International Forum of Terrorism Risk (Re)insurance Pools (IFTRIP) Livestream 2020.

He said: “We need creative solutions involving public and private stakeholders to strengthen our global ability to mitigate the impact of shock events and to improve our global resilience.

“For the past nine months we have been living through a shock event, the Covid-19 pandemic has caused more than one million deaths. It has severely impacted economies, businesses, and individuals and tested the response recovery capability worldwide.

“While it is first and foremost a human tragedy, we are deeply concerned about its impact on the economy, industry, businesses and people – we are eager to see the world recover. “

Stressing that private and public partnerships could help mitigate risk for future pandemics, he said government cannot do this alone.

Doyle explained that the last few months “have demonstrated that traditional insurance solutions and the commercial insurance market cannot fully provide the protection” that businesses need.

Silver lining

Doyle added that the pandemic has also accelerated the use of technology in insurance, as well as the transformation of business operating models to meet consumer demands.

Despite pandemics being on the risk radar for many years many businesses were unprepared for travel bans, border closures and lockdown, he said that those that “pivoted” strategically fared better.

Doyle said that Marsh has been taking to business leaders to prepare for future shock events to “enhance the risk management and resilience strategies”.

He listed several recommendations to help with this:

Regularly plan for shock events
Review risk resiliency
Review lesson learned from Covid-19
Consider risk correlations

In relation to the last recommendation, Doyle said that the industry must plan carefully to prepare for more than one shock event occurring at the same time such as a terrorist attack during a pandemic to ensure sufficient capital.