Insurance innovation can move rapidly
By: The Bionic Underwriter
Tags: Covid 19, Insurtech, Insurance, Vaccines, IoT

Full text from press release.

Available on lloyds.com

Public-private collaboration, including 14 global (re)insurers, addresses critical risks faced by COVID19 vaccines and other health commodities during distribution.

Lloyd’s and Parsyl, Inc. today announced the launch of the Global Health Risk Facility (GHRF) which will make available billions of dollars of insurance coverage, together with risk mitigation services to help protect and support the global distribution of COVID-19 vaccines as well as critical health commodities.

The launch of the GHRF includes support from the U.S International Development Finance Corporation (DFC) which has approved up to $26.7M for the Facility. The DFC loan will be used to capitalize the new public-private Syndicate 1796, and allow the GHRF to offer cost-effective insurance policies for shipments of vaccines and medical products to developing countries.

The GHRF is an alliance of insurance and technology partners* that together will provide comprehensive insurance and risk mitigation services for the storage and transit of life-saving medical supplies such as temperature sensitive vaccines and medicines, diagnostics, PPE and ancillary cold chain equipment. The facility is anchored by Syndicate 1796, which operates at Lloyd’s and will begin underwriting in January 2021. Syndicate 1796 is the first public-private partnership to address a global health emergency in Lloyd’s 330-year history.

Distributing cold chain vaccines and pharmaceuticals safely around the world is extraordinarily complex and they can easily spoil if not properly maintained, especially at the last mile of transit where infrastructure is weak. The GHRF will protect the quality of the goods and the financial investments made to supply and distribute them at a global level.

The proposed loan from DFC, America’s development bank, will enable Syndicate 1796 to write insurance policies for the distribution of health commodities to eligible low, lower-middle, and upper-middle income countries. The funds will go towards Funds at Lloyd’s (FAL) to support underwriting and provide customers with the security of Lloyd’s A+ rating from Standard & Poor’s, AA- from Fitch and A from A.M. Best. Parsyl and DFC are on track to finalize loan terms and documentation in the coming weeks.

A critical feature of the insurance platform will be the Risk Management Accelerator (RMA), which is separately funded by participating syndicates and donors and supported by the risk consulting services of AXA XL. The RMA will provide funding and services to enable eligible GHRF clients to access better data and risk mitigation solutions which will strengthen the vaccine supply chain. The RMA will fund a range of services, including conducting surveys of storage locations, supply chain risk evaluations and technology enabled data collection.

Ben Hubbard, CEO, Parsyl said: “By unleashing the power of data, we’re addressing a critical insurance gap when the world needs it most. Launching an undertaking with such broad scale and scope couldn’t have happened without the expertise and dedication of this incredible cross-industry group of public and private partners. It’s now time to vaccinate the world and we’re so proud to be contributing to this monumental global effort.”

John Neal, CEO, Lloyd’s of London said: “As the world prepares to undergo the largest vaccination programme in human history, ensuring the safe and effective distribution of the vaccine is critically important in tackling this global health emergency. We are thrilled to be launching the Global Health Risk Facility at Lloyd’s — a fantastic example of the way in which our global insurance market has come together to deliver an innovative new solution and model for solving complex global risk challenges posed by the pandemic.”

Adam Boehler, CEO, DFC said: “This important project will help ensure that Covid-19 vaccines remain safe and effective during transportation. We believe this innovative insurance industry collaboration can set up a new model for addressing future global health challenges.”

Chris McGill, Head of Cargo at Ascot Group and Active Underwriter for Syndicate 1796 said: “We’ve been working with Parsyl to solve the challenges of insuring health commodities in emerging markets for nearly two years. The unique combination of a private/public collaboration, technology from Parsyl and risk management from market leaders makes up the DNA of the GHRF. Ultimately these elements have enabled the long-term provision of insurance for this vital supply chain.”

Sean McGovern, CEO, UK & Lloyd’s market at AXA XL said: “We’re very proud to be part of this extraordinary collaboration, harnessing AXA XL’s global risk consulting expertise to advise on the safe distribution of vaccines and AXA’s global footprint to provide emerging markets with local insurance cover.”

Kevin Rimmer, Head of Cargo at McGill and Partners said: “In the midst of a global pandemic, this bold initiative demonstrates the insurance industry’s agility to react and create a vaccine distribution solution at scale and speed. We are delighted to have architected the critical development of the Global Health Risk Facility (GHRF) which is openly available to all clients and brokers worldwide.”

Shaun Crawford, Global Industry Leader, EY said: “Transporting billions of live vaccines around the world at speed will be a hugely complex process, which requires collaboration across many industries and governments. This GHRF initiative demonstrates the importance of aligning market-leading innovation in the global life sciences industry with the deep-rooted insurance expertise of the UK specialty market and governments around the world to respond to this most pressing global health challenge. We are proud to play our part in supporting the world’s largest vaccination campaign.”