RIMS calls for pandemic risk insurance program

Risk management society RIMS has issued a letter to the US government requesting the creation of a pandemic risk insurance program to accelerate economic recovery.

According to RIMS’ letter, a pandemic risk insurance program would provide greater access to capital from lenders and establish a viable insurance market with sufficient, affordable capacity. Additionally, it would create certainty for businesses and organisations of all sizes across the US and ensure that businesses can meet future pandemic events with greater resilience.

RIMS is calling on the risk management community to support the initiative by contacting their local Congress member.

Prior to the letter, RIMS administered a survey to US risk professionals to ascertain their perspective on a federal pandemic insurance backstop. Key findings from survey included:

• 67% of risk professionals anticipate direct business interruption losses due to COVID-19;
• 77% expect the losses to be over $1m. Included in that group was 36% who estimate losses to be more than $25m;
• 91% are supportive of a TRIA-type federal loss-sharing program for insurance claims relating to losses resulting from a pandemic or epidemic;
• 65% of risk professionals would be willing to pay up to 5% more in premium.

“From our homes and our local communities to the boardrooms of some of the world’s largest corporations, COVID-19 has highlighted the need for strong risk management strategies to address interruptions resulting from a global pandemic,” said RIMS President Laura Langone. “Congress has done exceptional work by quickly introducing the CARES Act but there is still much work to be done. We look forward to the opportunity of collaborating with them to develop a sound pandemic program that instills confidence in businesses and reinvigorates the economy.”