The specialist Lloyd’s of London insurance and reinsurance marketplace has announced the creation and in principal approval of Syndicate 1796, a new “syndicate in a box” designed to insure both the storage and transportation of a COVID-19 vaccine once developed to emerging economies.
The marketplace’s newest syndicate in a box has been developed by Parsyl, an insurtech firm and Lloyd’s Lab alumni, in close partnership with Ascot as managing agent, in cooperation with AXA XL, McGill and Partners and Gavi, the Vaccine Alliance.
Syndicate 1796 forms the foundation of the Global Health Risk Facility (GHRF) at the Lloyd’s market, which is designed to provide comprehensive insurance and risk mitigation services to support the manufacturing and distribution of a coronavirus vaccine development efforts
Lloyd’s states that the new syndicate in a box is aiming to commence writing business from the start of October, 2020.
As part of the GHRF, Lloyd’s explains that Syndicate 1796 will be backed by development finance capital, enabling it to share risks with leading cargo syndicates, making fairly priced cargo coverage available. In addition, the GHRF is set to offer ‘All Risk’ cargo coverage for transit and storage risks on all global health products related to the virus, and any other infectious disease control and prevention programs.
This is the first time in the history of the specialist Lloyd’s re/insurance market that a public-private syndicate has been created to address a global health emergency.
Led by Ascot, Lloyd’s states that the GHRF will adopt a portfolio approach, with a focus primarily on global distribution of products to low income countries supported by global public health agencies.
Furthermore, GHRF will also provide cover via direct insurance or reinsurance, for in-country distribution risks to make sure vaccines and other commodities are protected as they are stored in warehouses and travel through health systems.
According to Lloyd’s, eligible insurers include private manufacturers, procurement agents, logistics companies, Ministries of Health and other public agencies supporting the distribution of COVID-19 vaccines and other lifesaving products to low income countries.
John Neal, Chief Executive Officer (CEO) of Lloyd’s, commented: “There is broad consensus that life can only return to normality after a vaccine is developed, distributed and administered around the world. Lloyd’s has an important role to play in insuring the many risks associated with this global medical response and we are delighted to approve a new innovative syndicate that will provide effective cover for local vaccine distribution supply chains.
“This unique partnership is a real demonstration of the value and ingenuity the Lloyd’s market can bring to help address a global health emergency, as we share risk to support the brave efforts of those racing to develop and distribute a COVID-19 vaccine.”
Ben Hubbard, CEO of Parsyl, said: “We’ve seen Lloyd’s stand behind risks to some of the world’s greatest achievements and innovations. We asked, why not find a way to stand behind the largest vaccine campaign in human history. The Global Health Risk Facility will do this by sharing risk and leveraging new data to unlock insurance solutions for high stakes vaccine distributions around the world.”
In partnership with the GHRF and Syndicate 1796, a new Risk Management Accelerator (RMA) is set to be created to provide engineering services for loss prevention and reduction in an effort to bolster the supply chains for existing vaccines and prepare regions for COVID-19 vaccine distribution.
Andrew Brooks, CEO of Ascot Group, commented: “The GHRF is an excellent example of how the insurance industry is addressing previously uninsured risks. Ascot and the wider insurance market has the underwriting expertise, but to put together a facility such as this requires syndication, infrastructure and market collaboration which Lloyd’s is uniquely placed to deliver. Such a facility is enabled by high quality new entrants such as Parsyl who have the ideas, technology and data to deliver this positive humanitarian solution.”
Steve McGill, CEO of McGill and Partners, said: “We are proud to support this critical initiative and be part of the largest movement of medical vaccines in history. At McGill and Partners, we are delighted to have worked on this audacious venture that combines innovative insurance and data and technology driven solutions to help dramatically improve supply chains and ultimately save lives.”
While Sean McGovern, CEO of AXA XL UK, added: “The Covid-19 crisis has escalated the need to improve the already challenging global distribution of vaccines. By sharing data and through innovative risk mitigation, this facility will play a crucial role in ensuring that vaccines travel safely through the global supply chain to all corners of the world.
“This is another example of the insurance industry working in a public private partnership to address critical public health issues. AXA XL, in line with AXA Group’s commitment to contribute to the equitable distribution of vaccines, is proud to be a part this initiative.”
Seth Berkeley, CEO of Gavi, the Vaccine Alliance, said: “We are focused today on making a Covid-19 vaccine available. But we have an equal challenge in distributing it. Whether it’s a Covid-19 vaccine or routine childhood immunizations, these life saving products are put at risk as they travel thousands of miles across the world to reach remote communities in Africa and Asia.
“Protecting vaccine investments saves lives. That’s why this unique partnership is so important because it will provide a combination of coverage, incentives and data that can both prevent losses from happening and provide protection if they do.”