The pandemic and subsequent economic recession has highlighted a protection gap in catastrophe insurance.根据日内瓦协会, less than 1% of the estimated $4.5 trillion global pandemic-induced GDP loss for 2020 will be covered by business interruption insurance.
成立于2011年，the European Insurance and Occupational Pensions Authority (EIOPA)is the European body responsible for insurance and occupational pensions. The EIOPA’s first chairman, Gabriel Bernardino, is retiring next month, and BRINK spoke to him about the need for shared resilience and public-private partnerships to help bridge this gap.
BERNARDINO: I think there is a clear recognition from all parties, that the current situation — when we look at the coverage of business interruption — is far from optimal. It creates risks for the companies and reputational risks for the insurance market.
I think we can do better collectively as a society to deal with these risks. There are different views, but I think that there is a high level of support for an approach that would combine public and private engagements in order to maximize the COVID-19 agenda and to have a better management of these risks out there.
There are solutions in the form of insurance and reinsurance mechanisms. What is needed at the end of the day is political willingness and political decision to move ahead.
边缘：Does the EIOPA have a view as to how to bridge this protection gap?
Better Data Is Needed
For the risk transfer, we propose a four layer solution. Firstly, direct insurers will need to have a role because insurance companies need to have some skin in the game. So there needs to be some coverage done by the insurance sector to participate in its common effort. It’s the role of the insurance that should go beyond just the role of conveying money from the public side to the policyholders.
A second layer is for the reinsurance market to have different elements; it can be pools that we have seen that developed in some countries, but also some alternative risk transfer mechanisms.
Thirdly, there will be a role for governments at the national level in excess of the private market capacity.
Finally, a fourth layer should be an EU-level support mechanism that could have different nuances. One possibility could be to have a new reinsurance solution on top of what is insured by the other layers.
BERNARDINO: Well, the EU Commission is now looking at this contribution from our side. It’s also looking at the lessons that can be taken from the crisis in terms of the costs of this business interruption in the different countries.
What we’re seeing right now is reinsurers tightening the wording of the contracts and explicitly excluding this risk. The situation will only be worse if we do nothing, and in the end, governments will pay.
BERNARDINO: Of course, alternative risk transfer mechanisms and the capital markets are quite relevant in terms of transferring risks — and we have seen that in different types of situations with other types of risks. Now, is it an easy solution? No..
Engaging the Capital Markets
通常资本市场宁愿在经济角度或金融市场视角完全不相关的风险中发挥作用。这种风险并非如此，但如果我们避免复杂性 - 如果我们可以减少道德风险，以便我们定义转移和覆盖范围的方式定义风险 - 那么我认为这些都会有所帮助拥有更标准化的风险覆盖率，这些风险覆盖率更适合放在资本市场中。
BERNARDINO: We recently published a pilot risk dashboard that looked at different perils in European countries. We arrived at the conclusion that if you look at the last 10 years, only 35% of the losses of those natural catastrophes throughout Europe were covered by insurance.
So there is clearly a protection gap in this area and there are solutions: There are already some of the solutions in place, quite similar to what we propose to them, to the shared resilient solutions.
边缘：And presumably at a political level, there would be openness to that idea as a mechanism for handling climate change.
BERNARDINO: As you know now, everything related to climate change is a hugely important and central element of EU politics. The green agenda is one of the main objectives of the European Commission. So I really hope that this can also contribute to having this discussion at the political level and to take decisions going forward.
That’s why we have been looking at the possibilities of having multi-peril approaches because we have come out with this proposal specifically for the pandemic, but these are solutions that can also be applied in other types of risks.
In order to deal with this properly, we need to have a combination of EU and national implementation. If we just have one of the legs, I don’t think that this will change the picture very much.
If Nothing Is Done, It’ll Be Worse Next Time
I think that if nothing gets done, the consequences for the next pandemic will be even worse. The numbers suggest only around 1% of the costs induced by the pandemic in terms of business interruption have coverage worldwide.
But even that number will not be covered in the next pandemic, because what we’re seeing right now is reinsurers tightening the wording of the contracts and explicitly excluding this risk. The situation will only be worse if we do nothing, and in the end, governments will pay.
的消息,我一直在通过政治lly, and I hope that this time we can take the right approach. With the recovery, the opportunity is now.