Sompo Global Risk Solutions (GRS), a division of Bermuda-headquartered specialty P&C insurance and reinsurance group Sompo International, has launched a new parametric insurance product to cover epidemic and pandemic risks.
The parametric insurance product will be triggered by civil authority restrictions resulting from international public health emergencies that have been declared by the World Health Organization, Sompo International explained.
Named the Sompo GRS Epidemic and Pandemic Protection Program, the parametric product will help organisations to fill gaps in their insurance program coverage.
It will offer parametric insurance protection based on a number of pre-defined coverage options, such as loss of income, extra expense, debt servicing, supply chain disruption and other fixed costs that could be incurred from health emergency related restrictions and lockdowns.
As you’d expect with any product covering pandemic risks while COVID-19 is still spreading around the world, capacity for this new parametric product is set to be limited to begin with.
Sompo International said that, “limited capacity for the program is available to Sompo GRS clients and their captives in the real estate, hospitality, financial services, professional services, technology and life sciences industries, as well as the unit’s Asian-interest accounts.”
Sompo International has long utilised parametric triggers within catastrophe, weather and climate related risk transfer solutions for its clients.
This new offering will be one of the few options available for covering pandemic and epidemic risks at this time, as capacity has dried up across insurance and reinsurance for these risks.
But, with well-constructed parametric triggers, linked to specific coverage options like loss of earnings, footfall and supply-chain impacts, coverage can be more closely tailored to the clients needs and so become easier to price in an affordable manner.
Michael Chang, CEO of Sompo Global Risk Solutions, explained, “At Sompo Global Risk Solutions, we are committed to listening to our customers so we can bring them innovative risk management solutions to meet their specific needs.
“Our new epidemic and pandemic protection program combines the advantages of a parametric structure with traditional insurance to help our clients address the impacts of these unpredictable emerging exposures on their bottom lines.”