September 2021

Building pandemic 

resilience through 

public-private 

partnership
Building pandemic resilience through public-private partnership 2

Contents

01 Foreword

Executive summary

3

4

02 5 The pandemic’s insurance coverage implications

COVID-19’s economic and industry effects 03 13

04 22 The case for a public-private partnership

05 24 Building pandemic resilience

06 28 Working together to manage pandemic risk
Building pandemic resilience through public-private partnership 3

Foreword

In 2021, we’ve seen a remarkable change 

from just a year prior. The proliferation 

of vaccines and other developments 

have helped facilitate the reopening of 

businesses and easing of some restrictions 

in many countries. Once again, people are 

living their lives, businesses are earning 

revenues, and economies are recovering.

Still, challenges remain. The delta variant 

of the coronavirus is spreading in many 

regions, including parts of the US. And none 

of us will forget the effects — both personal 

and professional — of the last 18 months.

As the world’s leading insurance broker 

and risk advisor, our core mission is to 

help our clients manage risk. The value we 

deliver to clients — insurance policyholders 

— includes acting as an advocate on 

their behalf. In that capacity, we believe a 

public-private partnership is essential to 

containing the effects of the next pandemic 

or epidemic.

COVID-19 has simultaneously demonstrated 

the importance of insurance coverage to 

businesses — and to the US and global 

economies — and its limited ability to 

respond to the effects of major public health 

crises. While some specialty insurance 

policies purchased before 2020 may have 

included coverage for pandemic risk, 

most policies do not explicitly provide 

such coverage.

Insurers, generally, hold the position that 

property, casualty, and other insurance 

policies are designed to cover losses 

suffered by individual insureds, but not for 

the aggregate economic impacts from a 

pandemic, such as extended lockdowns of 

large communities or entire countries.

The bottom line: Existing insurance 

solutions — and insurers alone — cannot 

fully protect businesses from the potentially 

sizable losses they could incur during the 

next pandemic or epidemic. Instead, given 

the complex nature of pandemic risk, a 

strong public-private partnership is required 

to effectively manage it.

Although Marsh is not promoting a specific 

solution, we are advocating for a publicprivate partnership which has the financial 

support and backing of the United States 

government. Many businesses and other 

organizations share our view that such 

a partnership can help build resilience, 

reduce uncertainty, and accelerate 

economic recovery by leveraging the 

insurance expertise and infrastructure 

already in place.

From the establishment of fire brigades 

after the Great Fire of London of 1666 to 

the creation of the Terrorism Risk Insurance 

Program after 9/11, governments and the 

private sector have come together many 

times before to reduce risk and restore 

insurability. A similar venture today between 

the government, insurers, and businesses 

— backed by lessons learned to date and 

loss data from Marsh and others — can 

help facilitate pandemic coverage, align the 

needs of insurance buyers and insurers, 

and incentivize preparedness, mitigation, 

and resilience.

These actions can enable a more proactive 

and agile response to the next public health 

crisis. And it can help make pandemic risk 

more manageable and enable our economy 

to build the resilience it needs for the future.

John Doyle

President and CEO, Marsh
Building pandemic resilience through public-private partnership

4

Executive summary

COVID-19 is far from the first infectious disease to become 

a pandemic. But many of the effects of 2020 and 2021 have 

been unprecedented. More than 4.4 million people have 

died worldwide as a result of COVID-19, and more than 200 

million cases have been confirmed. In addition, much of the 

economic progress made in the years since the 2008 financial 

crisis has been reversed in just 18 months.

Although the US and global economies are growing again, 

output in many countries is expected to remain below 

pre-COVID-19 levels for some time. The pandemic has 

contributed to substantial revenue drops for businesses, and 

will likely have long-term implications for several industries.

Among the pandemic’s various economic effects has been a 

sizable impact on insurance markets and coverage. Despite 

what ultimately may turn out to be substantial COVID-19 

claims payouts from insurers, policyholders have often found 

little comfort in property and liability policies.

Insurers are ready and willing to provide coverage in 

property, casualty, and other policies for losses suffered by 

individual insureds. But most policies do not provide explicit 

coverage for pandemic risk. And insurers have asserted in 

discussions with policyholders — and, at times, in litigation 

— that these policies are not designed to protect against the 

broader economic implications of pandemics.

Across many insurance lines, capacity is shrinking, terms 

and conditions are narrowing, and underwriting scrutiny 

is intensifying. Going forward, insurers are expected to 

continue to broadly exclude coverage for pandemic risk.

These far-reaching impacts have made clear that commercial 

insurers alone cannot fully protect businesses from a 

pandemic’s effects. Pandemic risk, however, can be insured 

through a strong, government-backed framework.

A public-private partnership to establish a pandemic 

reinsurance program can offer substantial benefits, 

including helping to limit private sector risk. It can also take 

many forms and draw on valuable lessons learned from 

the creation of various existing risk pooling mechanisms 

designed to insure flooding, extreme weather, terrorism, and 

other previously difficult-to-insure risks.

Such a solution will be crucial to containing the financial 

effects of a future pandemic. But it’s also vital that insurers, 

the private sector, and the government learn lessons from 

COVID-19 and work together to improve resilience and bend 

the pandemic risk curve.

Still, it’s especially crucial that we take action on a pandemic 

risk framework now. By working together, the public and 

private sectors can facilitate an efficient and effective 

insurance program that will accelerate recovery and build 

resilience amid the next pandemic.
Building pandemic resilience through public-private partnership 5

The pandemic’s insurance implications

Commercial insurance coverage typically responds to losses caused by natural catastrophes, such as earthquakes and hurricanes, and a range of business risks, from employee injuries 

to product liability and more. Although pandemics have occurred before, the economic impact of COVID-19 has been of a different magnitude, in part due to how interconnected people, 

businesses, and economies have become in the past few decades.

While insurers’ losses from COVID-19 totaled less than $50 billion as of August 2021, according to a Guy Carpenter analysis, projections on the pandemic’s ultimate cost have varied 

significantly. Some estimates have topped $100 billion, which would exceed total losses from Hurricane Katrina (see Figure 1).

Source: Guy Carpenter analysis, Dowling, Autonomous Research, Barclays, Bank of America, KBW, UBS, Lloyd’s, Wells Fargo, Goldman Sachs, Berenberg, Moody’s, and JP Morgan; updated as of August 17, 2021.

*Represents consolidated COVID-19 losses tracked by Guy Carpenter’s Business Intelligence team as of August 17, 2021, accounting for end of period foreign exchange rates.

**Lloyd’s estimate is for underwriting losses from COVID-19, including claims and anticipated lower profits due to lower premiums.

Current 

Losses*

Dowling UBS Autonomous

Average: ~$61B

BofA

$44.9B

Lloyd’s** KBW Goldman 

Sachs

Wells Fargo

01|	 Estimates of insured COVID-19 losses have varied significantly.

Berenberg Moody’s JP Morgan Barclays S&P

Insured losses ($ Billions)

IBNR $18.9B

(43% of total)

Reported $26.0B

$40-80B

$30-60B

$31-86B

$30-97B Up to $107B

Up to $50B Up to $50B

$30-100B

$50-70B

$56-90B

Up to $100B

$30-55B Up to $30B
Building pandemic resilience through public-private partnership 6

These losses, however, represent only a fraction of the enormous economic loss caused by the pandemic — a fact which has already posed recovery and resilience challenges for businesses, 

governments, and insurers, and will be of chief concern in the event of a future pandemic or epidemic. Moreover, it’s become apparent since the start of 2020 that property and liability policies 

are severely limited in their ability to respond to pandemic-related losses.

Although some specialty policies purchased prior to 2020 may include coverage for pandemic risk, it is not explicitly covered under the vast majority of policies. Insurers have generally taken 

the position that property, casualty, and other policies are designed to respond to losses suffered by individual insureds — but not to the aggregate economic impacts that a pandemic can 

present, including extended lockdowns of large communities or even entire countries.

Given the specific and extensive effects of COVID-19 to date, insurers have begun to broadly exclude pandemic risk from many policy types, and are expected to continue to do so going 

forward. The sheer magnitude of simultaneous losses around the world, difficulty in predicting governments’ actions aimed at containing infectious disease, and possibility of drastic changes 

in consumer demand — potentially overnight — make pandemic risk impossible for insurers and reinsurers to assume by themselves.
Building pandemic resilience through public-private partnership 7

PROPERTY/BUSINESS INTERRUPTION

Generally, property insurance policies are triggered by insured 

physical loss or damage. Many policies include business 

interruption (BI) or other time element coverage with various 

extensions, including for interruption by civil authority, ingress/

egress, attraction or leader property, or contingent business 

interruption/extra expense. The language in these policies and 

extensions can vary significantly.

Since the pandemic began, a number of first-party property 

and BI claims have been filed by companies seeking coverage 

under these provisions — most notably, the interruption by 

civil authority extension. Policyholders have argued that such 

an extension should respond to the shutdowns and closures as 

mandated by several states and municipalities.

The results of these claims filings have varied:

• A relatively small number of claims — typically submitted 

by companies seeking recovery under specific sublimited 

coverage extensions — have been adjusted and paid.

• In some cases, insurers have issued reservation of 

rights letters, made requests for information to aid in 

their investigations, and proceeded with the measurement 

of claims.

• Insurers have denied claims, citing a variety of reasons. These 

include the asserted absence of a physical damage trigger and 

the invocation of pollution/contamination and virus exclusions 

and other policy language.

Through July 26, 2021, nearly 2,000 COVID-19 coverage lawsuits 

had been filed in state and federal courts, according to the 

University of Pennsylvania’s Covid Coverage Litigation Tracker. 

Many of these suits remain unresolved.

Broadly speaking, decisions to date address policyholders’ 

allegations that the virus that causes COVID-19 — or related 

government shutdown orders on their own — constitutes “direct 

physical loss of or damage to property.” Some courts have ruled 

that applicable laws require tangible or structural damage to 

property and that the actual or suspected presence of the virus 

that causes COVID-19 cannot satisfy that requirement.

Other courts, however, have indicated that allegations of “loss of 

use” of the property may be sufficient to trigger coverage. Some 

rulings have also relied on the presence or absence of a virus 

exclusion in the policy.

Overall property capacity has rebounded to some degree in 

recent months from the initial shock of COVID-19 — and the 

cumulative effects of mounting natural catastrophe losses since 

2017. Still, communicable disease coverage remains restricted.

Although such coverage is available in some rare cases, most 

property and BI insurers have added communicable disease 

exclusions to policies they have written over the last 12 months. 

Insurers are expected to continue to push for the exclusion of 

communicable disease coverage in property and BI policies even 

after the threat of COVID-19 recedes.
Building pandemic resilience through public-private partnership 8

“

The bottom line: Existing insurance 

solutions — and insurers alone — 

cannot fully protect business from 

the potentially sizeable losses they 

could incur during the next pandemic 

or epidemic.
Building pandemic resilience through public-private partnership 9

GENERAL LIABILITY AND UMBRELLA/EXCESS

To date, general liability (GL) and umbrella/excess claims 

related to the pandemic — for example, alleging that 

a customer, client, or other third party was exposed to 

COVID-19 on an insured company’s premises — have not 

been overly prevalent.

That said, insurers have expressed some concern that 

casualty claims could develop in the future. Depending 

on the jurisdiction and whether a policy is written on an 

occurrence basis — meaning that the policy responds to 

any damage or injury that takes place during the policy 

period, regardless of when the claim is made — litigation 

could be filed well after the alleged exposure or injury.

As a result, some insurers have sought to add COVID-19 

or communicable disease exclusions to their policies, 

particularly for insureds in hospitality and other select 

industries. Insureds and their brokers have, at times, 

been able to negotiate removal of such exclusions, albeit 

sometimes at a price. Such exclusions have been more 

difficult to avoid in the excess and surplus lines market.

In some industries — for example, restaurants — 

policyholders have been concerned that language 

proposed by insurers has been overly broad, and could 

be interpreted as restricting essential coverage for 

foodborne illnesses and other perils that would not have 

the widespread impact of a pandemic or epidemic. In 

some instances, policyholders and their advisors have 

been able to amend such language.

In the absence of another pandemic in the next 

several years, insurers’ worries may be eased before 

communicable disease restrictions become a more 

common feature within casualty policies. This would be 

especially true if buyers and brokers continue to push 

back on potential restrictions.

The scientific community, however, has warned that 

pandemics and epidemics are likely to occur with greater 

frequency in the future. Another public health crisis not 

long after COVID-19 could prompt a firmer stance on 

exclusionary policy wording, significant reductions in 

capacity, and other harsh responses from underwriters. 

An important factor in determining market capacity will 

be how reinsurers react to future health crises.

For now, underwriters are applying greater scrutiny to 

all GL and umbrella/excess risks, both in the context 

of the pandemic and more broadly. During the 

extended soft market period that existed until early 

2019, insureds would often be able to secure favorable 

pricing and terms even without detailed responses 

to underwriting questionnaires.

In the current market, which already began to firm well 

in advance of COVID-19, that is no longer the case. Even 

those companies that provide highly detailed responses 

can still face challenging renewals given insurers’ focus 

on long-term profitability and market conditions.
Building pandemic resilience through public-private partnership 10

WORKERS’ 

COMPENSATION

In March 2020, as the coronavirus was rapidly spreading, 

many insurers were concerned about its potential impact on 

workers’ compensation. The expectation was that the virus 

would lead to an increase in communicable disease claims 

costs and a decline in “core” workers’ compensation claims 

costs, especially as many employees shifted to remote work 

and others stopped working completely.

More than a year into the pandemic, insurers’ initial fears 

have proven to be overstated. The reality is that the average 

COVID-19 claim is lower than the typical “core” workers’ 

compensation claim. Moreover, COVID-19 claims have 

generally been clustered in a handful of industries, such as 

healthcare and food and beverage manufacturing.

COVID-19, meanwhile, has highlighted how difficult it can be 

to determine compensability amid a public health crisis — 

mainly because individuals can be exposed both in and out of 

the workplace.

Workers in industries deemed “essential” — including 

healthcare, public safety, retail, food service, transportation, 

and hospitality — are among those with a higher likelihood of 

exposure. But healthcare professionals, for example, can be 

infected via exposure not only to patients but to coworkers, 

family members, neighbors, and strangers. In turn, these 

workers can infect other members of these groups.

Amid this challenging environment, a number of states 

have taken action. To date, roughly half of all states have 

introduced laws and regulations dictating how workers’ 

compensation coverage will respond to COVID-19 cases, 

according to Oliver Wyman research. A number of these 

actions create “rebuttable presumptions” that employees in 

certain professions — for example, first responders — who 

contract COVID-19 have been infected while working.

Whether a specific case is compensable will be determined by 

the facts established during an investigation of the claim, as 

well as the governing law in the jurisdiction where the claim 

is reported. Additionally, since there is no single “test” that 

can prove whether an illness or disease is compensable, it 

may ultimately come down to a decision by a court or state 

workers’ compensation board.

Employers are required in nearly all states to purchase 

workers’ compensation insurance. But unlike other forms 

of coverage, insurers cannot explicitly exclude occupational 

illnesses as a result of communicable diseases from their 

workers’ compensation policies.

Insurers, however, have sought to limit their exposure — 

notably, by eliminating “same communicable disease” 

endorsements. These endorsements, which were widely 

available prior to the pandemic, provided financial protection 

to employers by aggregating or batching individual claims 

with the same underlying cause.

Insurers can also choose not to underwrite certain employers 

if they perceive their communicable disease coverage as 

being too significant. At the height of the pandemic, for 

example, many insurers shied away from writing workers’ 

compensation for healthcare organizations.

Workers’ compensation capacity may be limited going 

forward for some types of employers — chiefly, healthcare 

organizations and first responders. Employers in industries 

where employees often work in close quarters — for 

example, hospitality and food and beverage manufacturing 

— may face challenges without properly documenting their 

protocols for providing safe work environments.

EVENT CANCELLATION

Capacity for event cancellation continues to decline amid the 

pandemic. By Marsh estimates, capacity has fallen more than 

30% compared to its size prior to COVID-19 as a number of 

large underwriters have exited the market. Some insurers 

have entered the market during that time period, but the 

capacity they have added does not come close to replacing 

what has left — and it appears that market capacity will not 

return to pre-pandemic levels anytime soon.

Deductibles and pricing are also on the rise. Although 

deductibles were not required to write coverage for small to 

midsize outdoor events prior to the pandemic, deductibles 

of 10% to 20% of insured sums are now standard. Coverage 

for indoor events is available without such deductibles, but 

pricing for such events has, in most cases, doubled.

Moreover, while communicable disease coverage was 

generally available and affordable prior to the pandemic, 

it is currently widely unavailable and is expected to be 

extremely difficult to include in event cancellation policies 

going forward. That said, some select insurers have been 

able to craft limited communicable disease coverage for 

film productions where all cast and crew members have 

been vaccinated and sequestered in “bubbles” to limit 

COVID-19 exposure.
Building pandemic resilience through public-private partnership 11

Professional and 

Technical Services 151

Energy 23

Administration and 

Support Services

45

MANAGEMENT LIABILITY

COVID-19 has compounded the numerous challenges already mounting for 

management liability lines prior to the pandemic. These challenges included 

increases in claims frequency and severity stemming from the #MeToo movement, 

an uptick over historical levels in event-driven litigation brought by public company 

shareholders, and lawsuits in both federal and state courts against companies 

engaging in initial public offerings.

Financial pressures on insurers have only been exacerbated by the pandemic, resulting 

in many buyers seeing significant increases in pricing and retentions over the last 24 

months, particularly for directors and officers liability (D&O) — and, more recently, 

employment practices liability (EPL).

D&O underwriters have been concerned about the potential effect of COVID-19 on 

distressed companies and those in industries that have faced significant challenges 

amid the pandemic. Those concerns, however, have moderated somewhat since the 

early days of the pandemic.

The pandemic has sparked a limited number of securities claims, including some 

related to its economic impact — primarily targeting consumer-reliant industries, 

such as hospitality and tourism — and an alleged failure of company leadership to 

adequately address workplace safety concerns. Life sciences companies developing 

vaccines, testing technologies, and personal protective equipment (PPE) have also 

been susceptible to claims.

As of August 19, 2021, workers had filed more than 3,000 COVID-19-related 

employment lawsuits in federal and state courts, according to Fisher Phillips’ COVID-19 

Employment Litigation Tracker. Healthcare entities were the most frequent targets in 

these cases, accounting for more than one-fifth of all suits (see Figure 2).

02| Healthcare organizatons have been the most frequent 

target of COVID-19 employment suits filed to date.

Healthcare

Retail and Wholesale

Hospitality, Sports, 

and Entertainment

Manufacturing

Government

Construction

Education

Transportation

Real Estate and 

Rental Services

Personal Services

Nonprofit, Industry, or 

Civic Organizations

Communications, Media, 

and Technology

Staffing, PEO, and 

Employment Services

Other

680

301

262

250

199

151

145

126

Automotive 119

Financial Institutions 122

95

71

67

60

52

58

Source: Fisher Phillips; data as of August 19, 2021
Building pandemic resilience through public-private partnership 12

Among other claims, these suits have often alleged that employers:

• Retaliated — in the form of wrongful terminations, demotions, and other adverse 

employment actions — against employees who have made leave requests 

or spoken up about their employers’ failure to promote safe and healthy 

working environments.

• Discriminated against employees in protected classes in decisions regarding layoffs, 

furloughs, and resumption of work.

• Failed to properly track time amid the transition to remote working models.

To date, however, pandemic-related coverage restrictions on D&O and EPL policies have 

not been commonplace. Although some insurers have added COVID-19 and reduction 

in force exclusions to their EPL policies for certain insureds, coverage has generally not 

been eroded during the pandemic.

Still, insurers are scrutinizing their risks and probing prospective insureds about 

their responses to COVID-19. EPL insurers, in particular, are asking employers about 

reductions in force during the pandemic — which could give rise to future claims — 

and expect insureds to consult with outside counsel in making these critical business 

decisions. Insurers are also closely monitoring potential vaccine mandates and 

employers’ plans to return employees to workplaces in 2021 and beyond.
Building pandemic resilience through public-private partnership 13

COVID-19’s 

economic and 

industry effects

Although the development and distribution of vaccines in recent months 

has been a cause for optimism, the COVID-19 pandemic’s effects on 

people and economies remain severe. As of August 23, 2021, more than 

200 million COVID-19 cases had been confirmed globally, resulting in 4.4 

million deaths, including more than 600,000 in the US, according to the 

World Health Organization (WHO). The pandemic has also reversed much 

of the economic progress made in the years since the 2008 financial crisis.

In 2020, GDP is estimated to have fallen by 3.2% globally and 3.5% in the 

US, according to International Monetary Fund’s (IMF) World Economic 

Outlook for July 2021. The IMF projects that growth will rebound in 2021 

and 2022 (see Figure 3), but output in many countries is expected to 

remain below pre-COVID-19 projections through at least 2022, according 

to the Organization for Economic Cooperation and Development (OECD).

Amid the pandemic, nearly 100 million people globally have been thrust 

into extreme poverty, according to the World Bank; food insecurity is also 

growing. This represents the undoing of three decades of progress in 

poverty reduction and equality.

03| The global economy is expected to rebound in 2021 and 2022, but 

contracted significantly in 2020.

World Economic Outlook Update July 2021

Growth Projections by Region (Percent change)

-3.2

2020

6.0

2021

4.9

2022

World

-3.5

2020

7.0

2021

4.9

2022

United

States

Source: International Monetary Fund World Economic Outlook, July 2021; 

percent changes
Building pandemic resilience through public-private partnership 14

While governments in many countries — including the US — have offered unprecedented financial support 

to businesses and their employees through wage subsidies, tax deferrals, and guarantees, it has come at a 

heavy cost. Debt-to-GDP ratios in OECD countries are projected to have risen 23% in 2020 and are forecast 

to rise an additional 5% in 2021 (see Figure 4). In many countries, debt levels have reached their highest 

level in decades, and the pandemic’s impact on government debt has surpassed even that of the 2008 

financial crisis.

Moreover, despite this assistance, the cumulative effects of government lockdowns, social distancing 

requirements, and changes in consumer behavior have led to significant declines in revenue for businesses 

across multiple sectors. And while some parts of the economy have done well, there will be long-term 

implications for many industries, whether they have innovated to overcome the pandemic’s challenges or 

are still encumbered by them.

04| The pandemic has contributed to a sharp rise in debt-to-GDP 

ratios in OECD countries.

49%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

53%

62%

66%

69% 71%

73% 73% 73% 73% 72% 72% 72%

92%

88%

Source: Organization for Economic Cooperation and Development
Building pandemic resilience through public-private partnership 15

RETAIL AND RESTAURANTS

COVID-19 brought significant pain to the retail and restaurant industries. In 2020, more 

retailers declared bankruptcy than in any year since 2009, according to financial advisory 

firm BDO. The National Restaurant Association, meanwhile, reported in December 2020 

that more than 110,000 establishments were closed permanently or long-term as a result 

of the pandemic.

The industry, however, is poised to bounce back as pandemic restrictions are lifted and 

consumer confidence grows. The National Retail Federation now forecasts that retail 

sales will grow by double digits in 2021.

Still, COVID-19 will have a long reach for retailers and restaurants. And like its impact on 

other sectors, the pandemic accelerated a number of already developing trends.

The most notable of these shifts has been the adoption of omnichannel marketing 

models. Online ordering coupled with delivery and in-store pickup options that were 

once value-adds are now absolute essentials, and have been embraced by consumers. 

Even as shoppers and diners continue to physically return to stores and restaurants, they 

will likely expect these options to remain available long after the pandemic ends.

Going forward, organizations will need to contend with potential demographic changes 

brought about by the pandemic, including an anticipated move by many people away 

from large cities. Although cities will remain population hubs, retailers and restaurants 

will need to consider the effects of exurban population growth on their employees, 

customers, and operations. Effective fleet optimization plans will be crucial.

Meanwhile, the pandemic and other recent events that have had an outsize effect on 

the sector have highlighted the need to build greater resilience to a number of threats, 

including civil unrest, natural catastrophes, and ransomware and other cyber threats. 

In many organizations, these events have elevated the role of risk management and 

demonstrated its value.
Building pandemic resilience through public-private partnership 16

REAL ESTATE AND HOSPITALITY

Even before the pandemic, the real estate industry was in the midst of massive change. Commercial tenants 

were exploring smaller footprints as they moved to remote and hybrid working models. E-commerce was 

threatening brick-and-mortal retail stores, calling into question the viability of traditional shopping centers. And 

homeowners and residential tenants were increasingly seeking multifamily properties that offered amenities and 

value-added features.

COVID-19 has accelerated many of these shifts, but tempered others. While there may have been opportunities in 

the short- and long-term for some — including investments in industrial properties and warehouses — revenue for 

the sector has been down since early 2020. And significant uncertainty remains for the industry overall.

Hospitality, meanwhile, has suffered from a profound drop in occupancy rates over the last year. Although leisure 

travel is slowly picking up, business travel is not expected to return to 2019 levels until 2023 at the earliest, according 

to the American Hotel & Lodging Association (AHLA). Many employers now recognize the value of teleconferencing 

tools and employees’ desire to reduce the time they spend commuting and traveling. Some industry observers have 

suggested that business travel activity may never return to pre-pandemic levels.

Moreover, overall hotel occupancy for 2021 is projected to be 10% below 2019 levels, according to the AHLA. While 

this a smaller drop in occupancy rates than earlier projections, the AHLA noted in a recent report that “the hotel 

industry’s road to recovery is long and uneven, with urban markets disproportionately impacted.”

Meanwhile, US hotels are expected to generate $125.3 in room revenue in 2021, according to the AHLA. Although 

this is a substantial improvement from 2020, it is still more than $40 billion below 2019 levels (see Figure 5).

Labor shortages also represent a challenge for the industry. In June 2021, the unemployment rate for the hotel 

industry was 17.6%, according to the US Bureau of Labor Statistics; by comparison, the restaurant industry’s 

unemployment rate for the same period was 10.1%. In the early days of the pandemic, hotels were forced to conduct 

mass layoffs; while some workers have returned as occupancy has slowly picked up, many have sought more stable 

employment in other sectors. Hotel chains, meanwhile, have historically recruited seasonal employees from other 

countries via temporary worker visas, but the pandemic has made finding such workers difficult. The AHLA estimates 

that one in five hotel jobs will not return by the end of 2021.

05| Hotel room revenue has fallen sharply 

amid the pandemic and is projected 

to still be below pre-pandemic levels 

in 2022.

Source: American Hotel & Lodging Association; 

billions of dollars

$164.8

2018 2019 2020 2021 (Projected) 2022 

(Projected)

$169.3

$85.5

$125.3

$150.0
Building pandemic resilience through public-private partnership 17

CONSTRUCTION

COVID-19 has posed numerous challenges for 

the construction industry. Globally, projects have 

been delayed or cancelled and many regions have 

experienced extended shutdowns, often because of 

the inability to easily move foreign workers or deliver 

critical path components. For contractors, pressures 

on liquidity have also been increasingly common. 

Supply chains have been disrupted, and companies 

have faced often severe shortages, delays, and 

inflated costs for materials, labor, and equipment.

Generally, the construction industry has proven 

resilient amid the disruption caused by the 

pandemic. Companies reacted quickly during 

the early days of the crisis, with those that were 

able to redirect resources and rely on stronger 

cash positions faring the best. In many regions, 

construction sites have remained open, with 

contractors showing agility and innovation in 

managing safety, and pragmatism in working with 

owners to best manage the various pandemicrelated effects.

While COVID-19 alone has not yet had a significant 

impact on the commercial insurance market for 

construction companies, broader factors continue 

to affect capacity, pricing, and the availability of 

cover. It is, however, still too early to predict the 

pandemic’s wider effect on reinsurers, which 

may cause disruption for primary insurers and 

insurance buyers.

Overall claims volume as a result of the pandemic 

has been limited, with some companies filing delay 

in startup claims, most notably out of the UK. 

For COVID-19 — and the lockdowns imposed by 

governments to combat it — to trigger cover under 

insurance policies, construction companies must 

typically demonstrate physical damage, which has 

proven challenging. As is becoming increasingly 

common across many insurance lines, construction 

insurers are looking to incorporate exclusionary 

language related to communicable disease in 

many policies.

The pandemic will likely drive some lasting 

changes for the industry, both good and bad. 

Post-pandemic, many companies are likely to focus 

more on supply chain resilience and contractual risk 

allocation. Many safety enhancements introduced 

over the last 18 months are expected to become 

best practices for the industry. Labor trends will 

shift, with offsite personnel increasingly working 

from home and the shortage of skilled workers 

potentially driving greater diversity in the future 

construction workforce.

While less impacted than some industries, COVID-19 

has had serious consequences for construction. 

The industry has proven adaptable and learned 

many valuable lessons that will help it become even 

more resilient amid the next pandemic, although 

significant risk will undoubtedly remain.
Building pandemic resilience through public-private partnership 18

HIGHER EDUCATION

Most colleges and universities have resumed 

on-campus learning, with hybrid teaching models 

remaining in effect in many cases. But a number 

of institutions are wary of emerging COVID-19 

variants. With the possibility of new lockdown 

orders looming, many schools are reevaluating their 

approach to opening classrooms in the fall.

Vaccination questions have been especially pressing 

for schools. Some institutions are mandating that 

students and/or faculty are vaccinated before 

returning to campus, while others have chosen 

not to; several schools’ choices have been limited 

by the laws in their jurisdictions. In some cases, 

students or faculty have questioned or pushed back 

on varying standards and requirements for the 

two populations.

Meanwhile, the technology challenges for faculty 

and students, along with an increase in ransomware 

attacks, have heightened cyber risks for schools 

and created new expectations around cyber 

hygiene controls. In addition, some students and 

parents have sued, claiming that online learning 

represented a denial of the education they were 

promised. While many institutions are mindful of 

these challenges, remote learning appears likely to 

continue in some form even after the pandemic.

Institutions continue to feel the effect of economic 

losses as tuition, housing, sporting events, summer 

programs, and other sources of revenue have 

been depressed. The lack of property and business 

interruption coverage for communicable disease 

has had significant financial effects on schools, 

some of which have total insured values that reach 

into the hundreds of millions of dollars.

Although some travel bans have been lifted, 

American schools’ access to foreign students 

remains limited — notably, from China. The 

reported plans of the Biden administration to 

require that foreign visitors be fully vaccinated 

could further complicate schools’ efforts to attract 

foreign students.

Amid the rise of variants, many colleges and 

universities are concerned that state and federal 

governments will again take over their campuses 

for various pandemic mitigation purposes. These 

include establishing mass testing and vaccination 

centers and housing patients who cannot be 

accommodated by hospitals.

Legislation and funding measures have provided 

some relief to higher education institutions. But the 

economic pain from COVID-19 will not immediately 

dissipate. It may be years before students from 

China and elsewhere — who have been welcomed 

by schools in Canada, Australia, and Europe even 

amid the pandemic — return to the US in large 

numbers. Many schools have already been forced to 

pursue mergers and acquisitions in order to survive.
Building pandemic resilience through public-private partnership 19

HEALTHCARE

Perhaps no industry felt the brunt of the pandemic to the extent that healthcare did. Hospitals and 

other providers — particularly in the early days of the pandemic — were overwhelmed by the rapid 

spread of COVID-19 across the country and a surge of patients as a result.

In many communities, COVID-19 patient numbers have since subsided in a meaningful way. But 

providers are still feeling the effects of that initial surge and, more recently, the emergence of 

COVID-19 variants.

The onset of the pandemic led to the deferral of many elective procedures, including some that are 

necessary to treat serious conditions. According to Strata Decision Technology, 55% fewer Americans 

sought care in hospitals in March and April 2020 than in the same period in 2019.

The postponement of elective procedures — which are far more lucrative than COVID-19 care — was a 

significant blow to fee-for-service providers. Value-based care providers, by contrast, have historically 

seen less volatility in their cash flows, and generally fared better amid the COVID-19 patient surge last 

year. That dynamic may flip in 2021 as elective procedures resume, but could be challenged as hospital 

beds fill up and cautious behaviors resume due to the spread of COVID-19 variants.

The pandemic is expected to drive lasting changes for the industry. Healthcare providers’ interest in 

predictive analytics and artificial intelligence has only grown amid the pandemic. Previously skeptical 

consumers, meanwhile, have become accustomed to using telemedicine solutions, which are likely to 

become more prevalent going forward.

Then there’s COVID-19’s effects on the healthcare workforce, which was already aging and shrinking 

prior to the pandemic. The events of 2020 will likely lead to more healthcare professionals burning out. 

Many older practitioners have already chosen to retire in the last year, with more expected to join them 

in the coming months, while others have pursued career changes.

All of this provides important context as the battle against the COVID-19 pandemic continues and the 

threat of future pandemics remains ever-present. While healthcare providers are better prepared today 

for a global health crisis than they were 18 months ago, a resurgence of COVID-19 variants or a similar 

pandemic could bring significant economic pain — and loss of life.

Building pandemic resilience through public-private partnership 19
Building pandemic resilience through public-private partnership 20

AVIATION

From airlines to aerospace manufacturers, there remains an inextricable link between the 

aviation industry and the global economy. The pain of the pandemic has had an indelible 

impact on aviation companies.

After five years of growth and profitability through 2019, airlines saw a sharp reversal in 

2020. Amid a dramatic drop in air passenger demand, the airline industry lost an estimated 

$126.4 billion in 2020, according to the International Air Transport Association (IATA). The IATA 

forecasts additional losses of $47.7 billion in 2021, and uncertainty for the industry is likely to 

last at least until 2023 as airlines seek to rebuild their customer bases.

The impact on airlines has also had downstream effects for manufacturers. As demand for 

air travel fell, many aircraft were placed into storage, with some passenger planes being 

converted to freighters. Airlines have also cancelled or deferred new plane orders, creating an 

inventory logjam for manufacturers. The coming years will likely see more aircraft delivered 

than produced — an unusual state for the manufacturing sector.

COVID-19, meanwhile, has had significant effects on the insurance marketplace. Prior to the 

pandemic, pricing for aviation insurance was already firming, as years of losses exceeded 

premiums and punctured reinsurance layers. The pandemic exacerbated pressures on 

insurers, contributing to additional rises in pricing. Airlines and others have faced some 

claims during the pandemic — notably, suits filed by airline passengers alleging exposure to 

COVID-19 during flights.

Over the last 18 months, some insurers have withdrawn from the class or reduced their 

offered capacity. As premium levels have risen, new carriers have entered the market and 

existing insurers have expanded their capacity again, helping to spur competition. 

With insurers uncertain about depressed premium levels associated with COVID-19, a 

significant development amid the pandemic — particularly for airline insurance buyers — is 

the imposition of minimum premiums, which were not required by insurers prior to the 

pandemic. Some insurers have also attempted to introduce communicable disease exclusions 

in aviation policies, but they have met significant resistance from buyers.

In spite of these difficulties, the aviation industry has risen to the challenge of the pandemic. 

As they had during previous times of crisis, including the aftermath of September 11, 2001, 

aviation companies have demonstrated their ability to be adaptable, innovative, and resilient 

in the face of adversity. The industry is adjusting to new realities as it seeks to return to stable 

growth, and adopting new strategies to cope with uncertainties and manage the continuing 

effects of COVID-19.

Nevertheless, aviation companies face significant challenges and potentially lasting changes. 

The pandemic will force many airlines to substantially alter their fleets. Supply chains may 

present headaches for airlines and manufacturers alike. And a projected long-term reduction 

in labor supply will raise many questions for the industry.
Building pandemic resilience through public-private partnership 21

MARINE

Maritime companies with robust operations are generally managing the pandemic well as more and more goods 

are being shipped. But costs and freight rates are increasing, while shipping capacity is down. And as demand for 

shipping services increases, access to competent and reliable employees is critical.

More broadly, the pandemic is helping to reshape the sector. In a short amount of time, the distribution of cargo has 

shifted from B2B to B2C. The logistics industry has expanded, and control of supply chains has become even more 

crucial, something that is not likely to change in the near future.

COVID-19 itself has had a limited effect on the marine insurance marketplace. While capacity in other lines has been 

shrinking, it has grown in marine hull and cargo, which has benefited from relatively limited claims activity. Still, 

exclusionary language is becoming commonplace in marine cargo policies.

The pandemic has also presented a number of other challenges for marine-based businesses. One of the most 

significant has been ship crew repatriation, which has been complicated by travel restrictions imposed by 

several countries.

Another is disruptions to supply chains as a result of port delays and limited supply of freight space. Many supply 

chains are fragile and lack resilience, and ship owners and cargo shippers are concerned about the industry’s 

vulnerability to a future large-scale shock event.
Building pandemic resilience through public-private partnership 22

The case for a public-private partnership

COVID-19 has made clear that traditional solutions offered by the commercial insurance 

market alone cannot fully protect businesses from the enormous and far-reaching effects 

of pandemics. While pandemic insurance has long existed, its cost and the perceived low 

likelihood of an event has meant that it has rarely been purchased. And the number of other 

insurance policies that explicitly exclude pandemic risk is only growing.

The bottom line is that while insurers and reinsurers want to provide coverage for pandemic 

risks, some in the industry believe that they are uninsurable. But are they correct?

Our view is that they are not. Pandemic risks can be insured — but only through a strong, 

government-backed pandemic risk management framework.

A NEW PANDEMIC RISK SOLUTION

A public-private partnership to establish a pandemic reinsurance program can offer 

substantial benefits. And it’s especially crucial now — before the next pandemic.

A pandemic risk insurance facility can help limit — but not eliminate — private sector risk, 

providing critical assurances to lenders and equity markets and helping to accelerate 

economic recovery. It can also absorb much of the initial shock of a future pandemic, 

enabling businesses to retain employees, meet financial obligations through the peak 

of uncertainty and continue innovating.

Amid the pandemic, lawmakers in the US and globally are exploring a number of publicprivate risk pooling models. These include the Pandemic Risk Insurance Act of 2020, 

introduced in the US House of Representatives in May 2020, which proposes to establish a 

pandemic risk reinsurance program within the Treasury Department, which would provide 

compensation to insurers that incur losses as a result of pandemic-related coverage.

More recently, the US Senate Banking Committee examined the issue during a hearing on July 

22, 2021. Martin South, President of Marsh’s US and Canada Division, testified that absent a 

public-private partnership that engages the full credit and support provided by a government 

backstop, the global nature of pandemics means the insurance industry cannot take on 

the risk.

There are many past examples of how governments and the private sector have come 

together to reduce risk and restore insurability. The Great Fire of London in 1666, for example, 

led to the creation of fire brigades. Two decades ago, Congress passed the Terrorism Risk 

Insurance Act and created the Department of Homeland Security to coordinate security and 

intelligence responses to terrorism risk in the aftermath of September 11.

“Over time, the right risk program can spur new technologies, ways of working, services, 

insurance products, and processes to ultimately chip away at the enormous losses associated 

with pandemics, which can help make pandemic risk more manageable and enable our 

economy to build the necessary resilience it needs for the future,” South said.
Building pandemic resilience through public-private partnership 23

Risk pooling options and precedents

A public-private insurance/reinsurance mechanism for pandemic risk can be developed 

in several ways, ranging from pure private partnerships to state-financed funds for noninsurable risks (see Figure 6).

06| A public-private insurance/reinsurance mechanism 

could be developed in several ways.

In creating a new pandemic risk solution, policymakers can look to existing risk pooling 

schemes from around the world for models. Such mechanisms — which serve to 

mitigate risks that are often considered difficult to insure, including flooding, extreme 

weather damage to crops, and terrorism — can yield valuable lessons for the public and 

private sectors (see Figure 7).

07|	 Existing public-private partnerships can offer several

lessons to participants.

Semi-private pooling 

reinsurance scheme

• Joint entity created by 

insurers to pool risk and 

share knowledge.

• Participation may 

be voluntary or 

legally mandated.

• Financing primarily 

provided by the private 

sector, with limited (if 

any) intial government 

financing and typically no 

committed reserve.

Public-private partnership 

(PPP) reinsurance schemes

• Structured risk sharing 

model between 

policyholders, insurers, 

and government.

• Government explicitly 

provides backing to the 

private sector to cap 

exposure and 

drive affordability.

• Participation may 

be voluntary or 

legally mandated.

Public funds for noninsurable 

risks

• Pure government setup, 

without any direct private 

involvement (other than 

aligning coverage).

• Fund is created with a 

reserve, built up over time, 

that can be used to pay out 

claims in the event of 

a pandemic.

• Claims against the fund 

should be aimed at covering 

risk events that cannot 

be covered by existing 

insurance offerings.

Private Public

Relevant options for managing pandemic risk

Given their global nature, pandemics are unlikely to offer insurers and 

reinsurers any diversification. Some form of public support will likely be 

required to enable viable insurance and reinsurance markets.

Significant loss events 

or changes in how 

risks are modeled can 

lead to market-wide 

capacity withdrawal.

Launched in 2016, Flood Re was developed to provide affordable flood risk 

cover to the approximately 3% of UK homeowners living in areas with high 

flood risk. Industrywide improvements in flood risk modeling had made 

coverage unaffordable for this cohort.

In the US, the Terrorism Risk Insurance Program (TRIP) was established 

following a widespread withdrawal of commercial terrorism cover by 

reinsurers after the September 11, 2001, attacks.

Extreme risks typically 

require some form of 

government backstop.

Government treasuries are the insurer of last resort on a number of losssharing schemes. The US National Flood Insurance Program (NFIP) and 

the UK’s Pool Re, for example, have unlimited guarantees; TRIP and the 

Australian Reinsurance Pool Corporation (ARPC) have limited guarantees.

Public-private 

partnerships provide 

credibility and can 

be structured to 

gradually shift risk to 

the private sector.

The US and UK governments’ backing of TRIP and Pool Re, respectively, has 

enabled commercial insurers to access affordable terrorism reinsurance. 

Over time, the Pool Re fund grew and private reinsurer confidence was 

restored, to the point that £2.4 billion of reinsurance cover is now purchased. 

Federal reinsurance participation in TRIP, meanwhile, has fallen from 90% in 

2002 to 80% in 2020, while insurer deductibles and retentions have increased.

Programs can be 

used to incentivize 

the adoption of 

preventive measures.

To be eligibility for the NFIP, communities are required to adopt and enforce 

strict floodplain ordinances and offers premium discounts for outstanding 

performance. Similarly, Flood Re’s planned retirement by 2039 has prompted 

the UK government to commit to major investments in preventive measures. 

The program has also incentivized insurers to work to better understand, 

map, and model flood risk.

The US crop insurance industry supports continued agronomic research 

to determine how farmers can best incorporate risk management best 

practices in their operations and the impact those practices may have on 

insured crops.

The US SAFETY Act of 2002, meanwhile, was created to spur the adoption 

of improved security measures by limiting liability of companies providing 

anti-terrorism products and services for qualified vendors. Similar policies, 

coupled with a robust public-private insurance market, could incentivize 

private sector adoption of prophylactic measures to drive down exposures.
Building pandemic resilience through public-private partnership 24

Broad industry support for a pandemic 

risk solution

From construction, real estate, healthcare, finance, and 

manufacturing to sports, arts and entertainment, hospitality, and 

retail, a wide range of companies have publicly expressed support for 

a government-backed pandemic risk solution.

The Business Continuity Coalition (BCC), which advocates for a publicprivate partnership, was formed in October 2020 with the intent to 

“limit future economic damage from pandemics and other national 

emergencies that cause business interruptions.” The BCC’s members

include Live Nation, Marriott International, the National Football 

League, Sony Pictures Entertainment, and a number of industry 

trade groups.

L. Charles Landgraf, senior counsel at the law firm Arnold & Porter, 

appeared on behalf of the BCC at the Senate’s recent hearing on a 

potential pandemic risk framework. Landgraf testified that a publicprivate partnership “is an essential precondition to the prompt 

recovery of this nation’s economy, and going forward will help 

protect jobs and reduce economic damage from further pandemics.”

Other BCC members have similarly urged Congress to take action. 

These include:

• The National Retail Federation, which has called for a federally 

backed solution to “provide a mechanism for immediate and 

predictable economic recovery should the nation face another 

pandemic — even one of lesser magnitude — in the future.”

• The National Restaurant Association, which notes that the “social 

nature” of restaurants “is making it impossible for them to find the 

insurance they need to protect against pandemic losses. Without 

this public-private insurance backstop, the nation’s second largest 

private-sector employer will struggle to recover or grow.”

• RIMS, the risk management society, whose members include 

10,000 risk professionals in more than 60 countries. The pandemic, 

RIMS CEO Mary Roth said, “has taught business leaders many 

valuable lessons, most importantly, the need for insurance 

solutions to protect assets, employees and keep their enterprises 

up-and-running amidst a health crisis.”

Building 

pandemic 

resilience

A public-private partnership to backstop pandemic 

risk will be crucial to containing the financial effects 

of a future pandemic. But it is by no means the 

only way businesses and governments can manage 

the risks presented by communicable diseases. 

Insurers, the private sector, and the government 

can work together to improve resilience at the 

organizational and national levels, and to bend the 

pandemic risk curve.

A SYSTEMATIC 

APPROACH TO RISK

Beyond their role in issuing and administering 

pandemic insurance policies in a new marketplace 

facilitated by a federally backed program and 

reimbursing policyholders for claims following 

losses, insurers can play a critical role in developing 

and encouraging the adoption of pandemic loss 

reduction measures.

The insurance industry has a strong track record 

of helping businesses of all sizes mitigate critical 

risks, including natural catastrophes, workplace 

hazards, cyber threats, and more. That institutional 

knowledge and expertise can similarly help 

businesses understand and manage pandemic risk.

Specifically, insurers — in concert with insurance 

brokers and other advisors — can help businesses:

• Use data to better understand their critical 

risks. COVID-19 has made clear that many 

businesses have not fully contemplated the 

range of effects that an outbreak, epidemic, 

or pandemic can have on their people 

and operations, critical infrastructure, and 

governments. Greater investment by the 

insurance industry in data collection and 

modeling tools can help insurers, brokers, 

and businesses to anticipate and quantify 

potential risks.

• Obtain insurance coverage to meet their 

unique needs. Ideally, insurers will not 

offer one-size-fits-all coverage solutions to 

prospective buyers. As with insurance coverage 

made available via the federal Terrorism Risk 

Insurance Program, buyers should be able to 

customize the pandemic insurance policies 

they purchase — for example, selecting 

specific infectious disease risks to insure and 

adjusting limits to meet their risk tolerance 

and other preferences.
Building pandemic resilience through public-private partnership 25

• Enact practices to prevent pandemic-related losses. Insurance buyers seek to mitigate critical risks through 

superior building techniques, workplace safety programs, cybersecurity programs, and other measures. 

Insurers reward policyholders that can demonstrate their commitment to such processes in the form of 

more favorable pricing and terms and conditions. A federally backed pandemic risk insurance program that 

encourages improvements in health and safety practices can yield similar benefits.

NATIONAL READINESS

While the private sector can and should learn lessons from the COVID-19 crisis to better prepare for the next 

pandemic event, governments at all levels can do much to help manage and mitigate current and future 

pandemic risk.

COVID-19 has highlighted the need for federal, state, and local governments — in conjunction with national and 

global health organizations — to focus on three areas in order to build economic resilience and national readiness:

• Preparedness. Federal, state, and local governments must stockpile more equipment, including ventilators, 

masks, and other types of PPE that have become incredibly valuable commodities for some communities. 

Crisis response plans are also key, provided they are updated now, to reflect recent lessons learned, and 

regularly tested through tabletop exercises and other means. Governments can also encourage and facilitate 

data-sharing efforts by both the private and public sectors, which can aid preparedness and response efforts.

• Mitigation. Mitigation steps — including social distancing, handwashing, wearing masks, and more — are 

largely the responsibility of individuals. Governments can support these efforts by providing guidance 

and education to people and businesses about how they can prevent or slow the spread of the disease. 

Governments can facilitate mitigation by providing guidance on how to protect essential workers during a 

pandemic or epidemic.

• Insurance. While commercial insurers excel at allowing businesses, public entities, and nonprofit organizations 

to transfer the risks related to natural hazards and other critical risks, a pandemic could result in virtually 

unlimited losses — which, today, are largely uninsured. Historically, insurance coverage for the risks related to 

infectious disease has been limited or available only at a high cost. And public entities have relied largely on 

Federal Emergency Management Agency disaster funds or ad hoc funding measures to mitigate financial losses. 

A federal backstop can facilitate the creation of a viable insurance market that can offer affordable coverage for 

businesses, public entities, and nonprofits and provide crucial peace of mind to businesses.
Building pandemic resilience through public-private partnership 26

THE PRIVATE SECTOR’S 

JOURNEY TO RESILIENCE

The private sector was largely caught off guard by COVID-19. The immense costs 

dictate that in a post-COVID-19 world, governments, shareholders, lenders, and 

ratings agencies will request — and, in some cases, require — that businesses 

develop a clear view of their pandemic risk exposure and document their 

mitigation plans.

Results from Marsh’s recent Risk Resilience Diagnostic survey of nearly 1,000 

businesses’ approach to six critical risk areas — including pandemic risk — 

indicate that traditional resilience measures are not necessarily suitable when 

contemplating pandemic risk management strategies and immediate response 

actions. Now, more than ever, organizations require a forward-thinking approach 

to risk management, one that will help drive preparedness and build resilience.

The path to becoming more resilient will be different for every company, but the 

journey involves four common steps and behaviors:

Anticipating the unexpected. During the COVID-19 pandemic, even organizations with 

robust business continuity plans struggled because they failed to fully anticipate the extent of 

its impacts. Only 25% of respondents to Marsh’s survey use scenario-based modeling across 

their enterprise or comprehensively to evaluate the potential impact of emerging risks.

1

Integrating risk and strategy. Connecting risks to long-term strategy can help organizations 

move forward and mitigate their financial exposure, reputational damage, business 

interruption, and other losses. Yet only 25% of organizations fully take this important step.

Resilient organizations typically align through a collaborative process, and seek expert help in 

assessing their preparedness. Without this collaboration and counsel, organizations will often 

struggle to anticipate risks, which will impair their ability to develop effective response plans.

2

Avoiding misperceptions about preparedness. An accurate perception of preparedness is 

vital to managing any critical risk, as a false sense of security can halt an organization in 

its tracks.

The consequences of not being prepared can be severe. History has shown that organizations’ 

fortunes can unravel quickly following a shock event. Their options to manage an event may 

dwindle as circumstances spiral, as they did for many banks during the 2008 financial crisis, 

and more recently with the hospitality and travel industry during the pandemic.

3

Measuring what matters. Applying metrics consistently is a stumbling block for many. For 

risks that survey respondents rate as important or highly important, we would expect to find 

organizations conducting modeling and forecasting at correspondingly high rates. But only a 

minority do so, and most of those perform modeling and forecasting only in select areas.

4
Building pandemic resilience through public-private partnership 27

Protecting people

A vital component of any pandemic risk infrastructure going forward is protecting the 

health of employees, customers, and other third parties, and to help limit potential 

disruptions to employees’ lives and accelerate and ease their return to work following 

future stay-at-home periods.

Among other actions, safety and risk professionals — working with health officials, HR 

staff, and others — should focus on: • Proactive local screening. Epidemics and pandemics often start small, but can 

quickly grow. To mitigate risk and maximize containment, businesses must be 

able to detect disease patterns at the local level and on site. Techniques such as 

big data analytics and computational epidemiology can help organizations model, 

understand, and control the diffusion of disease. Analyzing trends in news reports 

and on social media, for example, can help spot the emergence of an epidemic 

before any formal declaration from the WHO or other health authorities.

• Locating employees and contact tracing. COVID-19 has made clear how 

important it is for businesses to be able to quickly locate employees and conduct 

rigorous contact tracing, both of which are core disease control measures and 

key strategies for slowing or preventing the spread of disease. While widespread 

monitoring will inevitably raise concerns about privacy, businesses will need to 

consider the tradeoffs from both a humanitarian and economic perspective.

• Digital health and telemedicine. If not in use already, these tools can help 

employers help their employees reduce their physical exposure to healthcare and 

hospital settings. This can support efforts to slow the spread of viruses, bacteria, 

and other pathogens in the workplace and the larger community.

• Mental health and employee engagement. Businesses need healthy, emotionally 

sound, and engaged employees in order to be productive. Efforts should be made 

to ensure connectivity — at formal and informal levels — between employees and 

with management if a pandemic forces social distancing. Organizations should also 

ensure employees have access to mental health resources and provide leaders with 

training to recognize and act upon mental health concerns.

A focus on data

COVID-19 will have several important legacies, including shining a spotlight on 

the need for organizations to become more resilient and adept at managing 

fast-moving events, including public health crises.

An outbreak can quickly become an epidemic, which can just as quickly become 

a pandemic. That means it’s vital that risk professionals, senior leaders, and 

others have access to accurate and robust data to track the progress of a health 

crisis, forecast future developments, and make smarter decisions related to 

people and operations. And with local and country changes constantly evolving, 

it’s just as important that they are able to weed through a glut of information 

and misinformation about public health threats to make smarter and more 

informed decisions.

Marsh is committed to helping our clients use data to better understand 

pandemic risk and make more informed decisions. Our COVID-19 Dashboard

— designed specifically for risk professionals — provides a single place for 

organizations to monitor COVID-19 developments globally.

Marsh’s dashboard incorporates data from a variety of leading sources around 

the world, including Johns Hopkins University's COVID-19 Data Repository, 

the Atlantic’s COVID-19 Tracking Project Data Repository, Our World in Data's 

COVID-19 Dataset, and Healthdata.gov. Users can glean insights on both 

COVID-19 case trends and vaccination rates.

The dashboard enables users to track and monitor COVID-19 hotspots at 

varying levels — down to the county level in the US. This can provide risk 

professionals, senior executives, and other stakeholders with snapshots of the 

state of the pandemic and answer critical questions. For example: • Are cases, hospitalizations, and deaths trending up or down in the areas 

where our clients, suppliers, and employees live and work?

• Where and when can our employees safely travel? • Are regional vaccination rates high enough to send employees back to 

the office?

As the COVID-19 pandemic continues and businesses face the prospect of 

more frequent and severe public health crises post-COVID-19, access to such 

monitoring tools is crucial. While monitoring epidemics and pandemics has 

historically proven challenging, Marsh’s COVID-19 Dashboard and other 

emerging tools can yield more accurate views of public health threats to enable 

more informed decisions.
Building pandemic resilience through public-private partnership 28

Working together to 

manage pandemic risk

After facing enormous and often unprecedented challenges over the past 18 months, there is now hope 

and optimism that we have reached a turning point in the COVID-19 pandemic despite the rise of variants. 

Still, significant work remains to manage the crisis, and people, businesses, governments, and economies 

must all keep an eye on future threats.

As we contend with the possibility of more frequent — and potentially deadlier and more costly — 

epidemics and pandemics in the future, it is crucial that governments and organizations be ready. COVID-19 

has provided a number of important lessons on how we can all better prepare and plan for such threats, 

and ultimately become more resilient to them.

Insurance coverage can play an important role in facilitating our recovery from the next major public health 

crisis. Insurers, however, cannot maintain a viable commercial market — one that can meet the needs of 

insurance buyers — on their own. And absent effective and competitively priced insurance coverage for 

pandemic risks, the demands on governments amid a future event may surpass those seen during the 

COVID-19 crisis.

The complexity of pandemic risk calls for close cooperation by the public and private sectors in managing 

its impacts. The key to building a more proactive and agile response to the next pandemic will be an 

insurance and risk management partnership with government that helps facilitate coverage, aligns the 

desires of both insurers and policyholders, and requires mitigation practices. Such an efficient and effective 

pandemic insurance program will accelerate recovery and build resilience.
This document and any recommendations, analysis, or advice provided by Marsh (collectively, the “Marsh Analysis”) are not 

intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information 

contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh 

shall have no obligation to update the Marsh Analysis and shall have no liability to you or any other party arising out of this 

publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely 

on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, tax, accounting, or legal 

advice, for which you should consult your own professional advisors. Any modeling, analytics, or projections are subject to inherent 

uncertainty, and the Marsh Analysis could be materially affected if any underlying assumptions, conditions, information, or factors 

are inaccurate or incomplete or should change. Marsh makes no representation or warranty concerning the application of policy 

wording or the financial condition or solvency of insurers or reinsurers. Marsh makes no assurances regarding the availability, 

cost, or terms of insurance coverage. Although Marsh may provide advice and recommendations, all decisions regarding the 

amount, type or terms of coverage are the ultimate responsibility of the insurance purchaser, who must decide on the specific 

coverage that is appropriate to its particular circumstances and financial position.

Copyright © 2021 Marsh, LLC. All rights reserved. MA21-16121 734946270

About Marsh

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