Insurance broker Marsh has collaborated with global bank Citi to create an innovative risk mitigation structure designed to help the Vaccine Alliance (Gavi) pre-purchase vaccines in bulk with greater confidence, and facilitate rapid and equitable distribution around the world.
Developed on behalf of Gavi, the risk mitigation structure will cover the risk associated with numerous governments that are self-funding their COVID-19 vaccine procurement through the COVAX Facility.
The structure offers protection against the risk of non-payment by 21 countries across Africa, the Americas, Asia, and Continental Europe. However, under the terms of the policy, the identity of the countries covered, and other aspects of the policy will not be disclosed.
The policy is underwritten by AXA XL, Chubb, Liberty Specialty Markets, Sovereign Risk Insurance, Swiss Re Corporate Solutions, and Tokio Marine HCC.
Stephen Kay, Political Risk Leader, Marsh, commented: “Striving for greater global vaccine equity by increasing vaccination rates worldwide will not only help countries recover faster from the impact of the pandemic, but may also reduce the risk of new variants that come from high levels of community transmission. This innovative structure will hasten that process by allowing Gavi to procure and distribute vaccines more speedily and with greater financial confidence.”
Assietou Diouf, Gavi’s Managing Director of Finance and Operations, said: “An initiative like COVAX requires a risk mitigation structure to match its scale, complexity and ambition. This new structure will further strengthen the foundation of COVAX, which is the best mechanism the world has to bring an end to the acute phase of the COVID-19 pandemic.”
Jay Collins, Vice Chairman, Banking, Capital Markets and Advisory at Citi, and lead banker for the Citi team which acts as financial and risk adviser to Gavi, added: “We are proud to have worked with Gavi, Marsh and the world’s leading insurance companies to design and implement this risk mitigation strategy for the COVAX Facility. The structure allows COVAX to accelerate further vaccine purchase agreements for the world.
“This public private partnership is a further example of the innovative steps the COVAX Facility is taking to achieve its mission.”