Lloyd’s moves ahead with landmark COVID-19 vaccine syndicate

Lloyd’s has announced the creation and in principle approval of its newest “syndicate in a box” Syndicate 1796, set up to insure the storage and transportation of a COVID-19 vaccine once developed to emerging economies. Syndicate 1796 forms the foundation of the new Global Health Risk Facility at Lloyd’s, which aims to provide comprehensive insurance and risk mitigation services to support the manufacturing and distribution of COVID-19 vaccine development efforts. The creation of a public-private syndicate to address a global health emergency is the first in Lloyd’s 330-year history.

Developed insurance technology firm Parsyl, with Ascot as managing agent, and with support from AXA XL, McGill and Partners and Gavi, the Vaccine Alliance, the GHRF will take a portfolio approach, focusing primarily on global distribution of products to low income countries supported by global public health agencies, such as Gavi, the Global Fund to Fight AIDS, TB and Malaria, PEPFAR and UNICEF.

The GHRF will also offer coverage via direct insurance or reinsurance, for in-country distribution risks to ensure the protection of vaccines and other commodities as they are stored in central warehouses and travel through health systems.

Eligible insureds will include private manufacturers, procurement agents, logistics companies, Ministries of Health and other public agencies supporting the distribution of COVID-19 vaccines.

John Neal, CEO, Lloyd’s of London said: “There is broad consensus that life can only return to normality after a vaccine is developed, distributed and administered around the world. Lloyd’s has an important role to play in insuring the many risks associated with this global medical response and we are delighted to approve a new innovative syndicate that will provide effective cover for local vaccine distribution supply chains. This unique partnership is a real demonstration of the value and ingenuity the Lloyd’s market can bring to help address a global health emergency, as we share risk to support the brave efforts of those racing to develop and distribute a COVID-19 vaccine.”

Ben Hubbard, CEO of Parsyl said: “We’ve seen Lloyd’s stand behind risks to some of the world’s greatest achievements and innovations. We asked, why not find a way to stand behind the largest vaccine campaign in human history. The Global Health Risk Facility will do this by sharing risk and leveraging new data to unlock insurance solutions for high stakes vaccine distributions around the world.”

In the GHRF, Syndicate 1796 will be backed by development finance capital, allowing it to share risks with cargo syndicates It will offer ‘All Risk’ cargo coverage for transit and storage risks on all global health products related to COVID-19 and any other infectious disease control and prevention programmes.

Final approval of the new syndicate is expected from August, with the goal of starting to write business from 1st October 2020.

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