Lloyd’s of London has partnered with supply chain data platform Parsyl to launch an insurance initiative for the distribution of COVID-19 vaccines.
The public-private collaboration includes 14 global re/insurers and aims to address critical risks faced by COVID-19 vaccines and other health commodities during distribution.
The initiative involves the launch of a Global Health Risk Facility (GHRF) and is expected to make available billions of dollars of insurance coverage, together with risk mitigation services.
Also supporting the launch is up to $26.7 million in backing from the U.S International Development Finance Corporation (DFC).
The DFC loan will be used to capitalize new public-private Syndicate 1796, which will anchor the GHRF and begin underwriting at Lloyd’s in January 2021.
Lloyd’s and Parsyl explained that both the GHRF and Syndicate 1796 have been developed in partnership with Ascot Underwriting as the managing agent, and in cooperation with AXA XL, McGill and Partners and Lloyd’s of London.
Participating insurers include Ascot, AXA XL, Beazley, Chubb, Talbot, QBE, Tokio Marine Kiln and Aegis and reinsurers to Syndicate 1796 include Convex, Canopius, Hamilton and RenaissanceRe.
“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,” said Lloyd’s CEO John Neal.
“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.”
Ben Hubbard, CEO of Parsyl, also commented: “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.”
Lloyd’s and Parsyl note that the safe distribution of cold chain vaccines and pharmaceuticals around the world is an extremely complex endeavour, as goods can easily spoil if not properly maintained, particularly during the last mile of transit where infrastructure tends to be weak.
To address these challenges, the GHRF will protect the quality of the goods and the financial investments made to supply and distribute them at a global level, while Syndicate 1796 will write insurance policies for the distribution of health commodities to eligible countries.
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.
EY has supported the initiative to establish the insurance entity at Lloyd’s and the design of the RMA, while McGill and Partners served as the broker on the (re)insurance placements, and Norton Rose Fulbright served as the legal advisor in establishing Syndicate 1796 at Lloyd’s. All business for the GHRF will be originated through Parsyl Insurance, a Lloyd’s Coverholder.
“This important project will help ensure that Covid-19 vaccines remain safe and effective during transportation,” said Adam Boehler, CEO, DFC. “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, also commented: “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 added: “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.”
Additionally, Kevin Rimmer, Head of Cargo at McGill and Partners, stated: “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.”
And finally, 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.”