The Insurance Regulatory and Development Authority of India (IRDAI) has established a nine-member working group to explore the possibility of establishing a pandemic risk pool.
India is the latest country to reveal that it’s exploring the launch of a pandemic risk pool to manage the risks related to reduced economic activity as a result of the outbreak of an infectious disease, such as COVID-19.
As seen in much of the world in recent months, the Indian government enforced a national lockdown in an effort to mitigate the spread of the novel coronavirus, resulting in the widespread closure of businesses and services across the region.
The economic disruption has been significant in all parts of the world, leading to the emergence of substantial fiscal packages designed to support economic recovery amid growing fears over a second wave.
“There is a need to examine long-term solutions to address the various risks which have been triggered by the current pandemic and offer protection in case of a future similar crisis,” explained the IRDAI.
The regulator has revealed that it has launched a nine-member working group, led by IRDAI Executive Director, Suresh Mathur, to examine if the establishment of a pandemic risk pool would help to address some of the risks associated with a virus outbreak.
“Some of the risks like business interruption losses without concurrent material damage loss; loss of employment would result in huge losses much beyond the capacity of government/ insurers/ reinsurers,” said the regulator.
As countries of all shapes and sizes start to open their doors and target a fast economic recovery, numerous public and private sector entities are working together in an effort to mitigate the financial burden of not only the COVID-19 pandemic, but future pandemic as well.