Pandemic has no borders, FERMA says, backing EIOPA's partnership proposals

European risk association, FERMA has welcomed insurance authority, EIOPA's report on a pandemic resilience approach based on public-private partnerships. The risk association is urging European institutions to act on EIOPA's ideas.

The principal aim of the paper, Shared Resilience Solutions for Pandemics, which is based on the views of commercial insurance buyers, re/insurers and brokers, is to address the near total absence of risk transfer for NDBI for systemic risks -- something FERMA itself recently proposed in its own Resilience Framework for Catastrophe Risks.

"Pandemic has no borders"

FERMA stated: "FERMA believes that a public-private insurance-based solution, based on a sound foundation of risk management, is essential to support European enterprises against pandemic. It also argues that, even though there is action in some member states, European-level involvement is necessary to create resilience across the Single Market.

"Only an insurance-based public-private partnership can provide appropriate incentives for companies to apply modern risk management / loss prevention tools that can respond to exceptional risks. This will contribute significantly to the overall recovery from the current pandemic and resilience to future catastrophic events."

For such an approach to work, the EU must be involved, FERMA says. This will help ensure minimum standards of national schemes across Member States.

"The EU should also establish an expert group for the necessary data sharing and risk modelling, as EIOPA suggests. Ultimately, a European financial backstop is likely to be necessary. At the same time, FERMA wants to see the EU promote risk management at enterprise and national level. Only by doing this, will we strengthen our resilience to catastrophic risks."

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