LONDON:Dec15:
Lloyd’s of London and supply chain data insurtech Parsyl have launched a programme to insure the distribution of COVID-19 vaccines in emerging markets as drugmakers race to address the biggest global logistical challenge since the Second World War.
The Global Health Risk Facility (GHRF), made up of 14 insurers and reinsurers, has been set up to address the challenges of transporting temperature-sensitive vaccines, and will be supported by $26.7 million in funding from the U.S International Development Finance Corporation, the companies said on Tuesday.
Participating re/insurers include Ascot, AXA, Aegis, Beazley, Canopius, Convex, Chubb, Hamilton, RenRe, QBE and Tokio Marine Kiln, among others.
The DFC loan will be used to capitalize a new public-private Lloyd’s syndicate, which will start operating in January, and allow the GHRF to offer cost-effective insurance policies for shipments of vaccines and medical products to developing countries.
The GHRF will make available billions of dollars of insurance coverage, the companies said here.
“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 of London Chief Executive Officer 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,” he said.
Several vaccine programmes are now seen as promising, but budgetary constraints in paying for them and challenges in storage and distribution cloud the outlook for many emerging market economies such as Brazil, Mexico, Indonesia, India, Russia and parts of Africa.
COVID-19 vaccine distribution is a headache for insurers, who are concerned about the extra-cold temperatures required to transport vaccines such as the one developed by Pfizer and BioNTech, the first Western vaccine off the drawing board. Theft or cyber attacks on the supply chain are an added worry.
“By unleashing the power of data, we’re addressing a critical insurance gap when the world needs it most,” Ben Hubbard, Chief Executive at Parsyl said.
The international police organization Interpol has issued a global alert here to law enforcement across its 194 member countries warning them to prepare for organized crime networks targeting COVID-19 vaccines, both physically and online.
The distribution of COVID-19 vaccines is a complex task even locally. Governors in more than two dozen U.S. states and territories are planning on using the National Guard in some capacity for COVID-19 vaccine distribution at this point.
Adam Boehler, CEO of DFC, said: “This important project will help ensure that Covid-19 vaccines remain safe and effective during transportation. We believe this innovative insurance industry collaboration can set up a new model for addressing future global health challenges.”
The first U.S. vaccine shipments departed Pfizer’s facility in Kalamazoo, Michigan on Monday, packed into trucks with dry ice to maintain the cargo at its required sub-Arctic temperature. The shipments were then flown by UPS and FedEx planes to cargo hubs and finally trucked or flown to vaccine-staging areas.
The GHRF programme will protect the quality of the goods and the financial investments made to supply and distribute them at a global level.
Syndicate 1796 is the first public-private partnership to address a global health emergency in Lloyd’s 330-year history, the companies said.
As part of the programme, AXA XL is providing risk consulting services.
Chris McGill, head of cargo at Ascot Group and active underwriter for Syndicate 1796, 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.”
Lloyd's noted that distributing cold chain vaccines and pharmaceuticals safely around the world is extraordinarily complex and they can easily spoil if not properly maintained, especially at the last mile of transit where infrastructure is weak.