In the effort to vaccinate the world against COVID-19, developing an effective vaccine was only the beginning.
We now face the daunting task of distributing billions of doses, which requires a complex and robust transportation programme that can reach all corners of the globe, regardless of the quality of the local infrastructure.
This is particularly challenging when you’re dealing with a fragile vaccine that requires specific temperature and storage protocols to remain effective.
The team at Parsyl, who already offer data-driven insurance coverage for perishable goods, recognised that a new strategy for insuring these life-saving vaccines and other health commodities was essential to enable global health supply chains to meet the challenge and afford the risk of distribution.
Parsyl CEO Ben Hubbard explains: “Previously, insurance for global health commodities has been fragmented, expensive and difficult to source. Insurance contracts sometimes don’t cover risks associated with the sudden changes that can occur during a pandemic or other global health emergency. When insurance is available, it is limited to global transits and once ownership of goods transfers to local partners, it is often too hard for them to find insurance that they can afford.”
Ben and his team realised that the status quo would be a real inhibitor for the movement of COVID-19 vaccines – and that this would only add to the existing challenges of rising insurance costs, increasing freight costs, and reduced air and ocean transport capacity that have occurred as a result of the pandemic.
In addition, other critical vaccine programmes (e.g. measles and polio) in many developing countries have been halted because of COVID-19. These urgently need to be restarted, despite the new challenges in transport and insurance. “We saw that a combined effort across public and private partners in cargo insurance and technology was needed to uniquely understand and share risk so that life-saving vaccines and health products can be safely delivered wherever they are needed.”
COVID-19 was of course the biggest focus. Ben realised that “once a COVID-19 vaccine became available, it would be critical that we protect and deliver every dose. To do this has required us to innovate, working with all our market partners, and use our combined expertise and strong partnerships to take a completely new approach to this specific insurance - one that can complement the manufacturing and distribution objectives of major COVID-19 vaccine development efforts.”
Hubbard continued, “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? ”
With this insight in mind, delivering that innovative insurance is the objective behind Parsyl’s launch of the new Global Health Risk Facility (GHRF), anchored by their “Syndicate in a Box”, which will serve as the market’s dedicated risk facility for COVID-related transit and storage risks in the developing world.
As a nod to the long history of the global fight for vaccination, the new Syndicate has been given the number ‘1796’ in honour of the year physician Edward Jenner carried out his first experiments into developing the smallpox vaccine.
Ben explains what the team have managed to put in place. “In the GHRF, Syndicate 1796 will be backed with capital from the U.S International Development Finance Corporation, allowing it to share risks with leading cargo syndicates and make better, fairly priced coverage available in low to upper middle-income countries. The GHRF 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 programs.”
Importantly, the GHRF will also offer coverage, via direct insurance or reinsurance, for in-country risks to ensure vaccines and other commodities are protected as they are stored in central warehouses and travel through health systems to the last mile. The focus will be very much on supporting countries where the help is most needed, and GHRF will back the global distribution of products to developing countries.
This unique partnership is a real demonstration of the boldness and ingenuity the Lloyd’s market can bring to help address a global health emergency. Not only is the risk-sharing programme unique, but the creation of a public-private syndicate to address a global health emergency is the first in Lloyd’s 330-year history. John Neal, CEO of Lloyd’s believes that “this unique partnership helps everyone share risk to support the brave efforts of those racing to distribute a COVID-19 vaccine.”