‘Wishful Thinking’ To Expect Sufficient Pandemic Coverage From Insurers Alone
26 May 2020
Dirk Wegener, President of FERMA, was UNIBA Partners’ guest in a half hour key note speech earlier this month.
In his presentation, Mr Wegener discussed the implications of COVID 19 related business interruption coverage gaps.
He acknowledged the tension between businesses faced with the frustration of uncovered losses and insurers’ needs for contract certainty, addressing the concern that they could be obligated by decree to grant retroactive coverage for risks they never intended to cover.
While the private sector alone cannot provide a solution, it should reasonably contribute to enabling a recovery from the crisis, said Mr. Wegener.
A FERMA task force has initiated dialogue with EU regulators to outline potential solutions within the EU.
The underlying vision is one of building resilience against systemic risks, not limited to pandemics, through public private partnerships. Bringing all stakeholders to contribute to a solution would allow for the much broader coverage that is needed, ensuring that it can apply irrespective of the specific type of trigger (i.e. also for wide spread cyber events).
Among the current proposals is a combination of commercial insurance, national and international pools and an EU-guaranteed backstop.
Absolutely key to this process is enterprise risk management. Here brokers have a potentially vital role to play through their market knowledge and ability to provide risk management related services.
UNIBA Partners will continue to provide access to key thinking on innovative coverage solutions through ad-hoc webinars.