Lloyd’s, Insurtech Parsyl Launch Insurance Facility for COVID-19 Vaccine Shipments
Lloyd’s, Insurtech Parsyl Launch Insurance Facility for COVID-19 Vaccine Shipments
Lloyd’s and insurtech start-up Parsyl Inc. announced the launch of the Global Health Risk Facility (GHRF), which will provide billions of dollars of insurance coverage, together with risk mitigation services, to help protect and support the global distribution of COVID-19 vaccines as well as critical health commodities.

A public-private collaboration, the GHRF has received support from 14 global insurers and reinsurers as well as the U.S International Development Finance Corp. (DFC). The DFC has approved a loan of up to $26.7 million for the facility, which will be used to capitalize the new public-private Syndicate 1796, and allow the GHRF to offer cost-effective insurance policies for shipments of vaccines and medical products to developing countries.

The GHRF is an alliance of insurance and technology partners* that together will provide comprehensive insurance and risk mitigation services for the storage and transit of life-saving medical supplies such as temperature sensitive vaccines and medicines, diagnostics, PPE and ancillary cold chain equipment.

The facility is anchored by Lloyd’s Syndicate 1796, which will begin underwriting in January 2021. Syndicate 1796 is the first public-private partnership to address a global health emergency in Lloyd’s 330-year history, said Lloyd’s. The syndicate was launched in July of this year.

Distributing cold chain vaccines and pharmaceuticals safely around the world is extraordinarily complex and they can easily spoil if not properly maintained, especially at the last mile of transit where infrastructure is weak, explained Lloyd’s in a statement. The GHRF will protect the quality of the goods and the financial investments made to supply and distribute them at a global level.

The proposed loan from DFC, America’s development bank, will enable Syndicate 1796 to write insurance policies for the distribution of health commodities to eligible low, lower-middle, and upper-middle income countries. The funds will go towards Funds at Lloyd’s (FAL) to support underwriting and provide customers with the security of Lloyd’s. Parsyl and DFC are on track to finalize loan terms and documentation in the coming weeks.

A critical feature of the insurance platform will be the Risk Management Accelerator (RMA), which is separately funded by participating syndicates and donors and supported by the risk consulting services of AXA XL.

The RMA will provide funding and services to enable eligible GHRF clients to access better data and risk mitigation solutions which will strengthen the vaccine supply chain. The RMA will fund a range of services, including conducting surveys of storage locations, supply chain risk evaluations and technology enabled data collection.

“By unleashing the power of data, we’re addressing a critical insurance gap when the world needs it most. Launching an undertaking with such broad scale and scope couldn’t have happened without the expertise and dedication of this incredible cross-industry group of public and private partners,” said Ben Hubbard, CEO of Denver, Colo.-based Parsyl. It’s now time to vaccinate the world and we’re so proud to be contributing to this monumental global effort.” (Parsyl provides internet-of-things sensors that can help protect sensitive shipments).

“As the world prepares to undergo the largest vaccination programme in human history, ensuring the safe and effective distribution of the vaccine is critically important in tackling this global health emergency. We are thrilled to be launching the Global Health Risk Facility at Lloyd’s – a fantastic example of the way in which our global insurance market has come together to deliver an innovative new solution and model for solving complex global risk challenges posed by the pandemic,” commented John Neal, CEO, Lloyd’s of London.

“This important project will help ensure that COVID-19 vaccines remain safe and effective during transportation. We believe this innovative insurance industry collaboration can set up a new model for addressing future global health challenges,” said Adam Boehler, CEO of the DFC.

Chris McGill, head of Cargo at Ascot Group and active underwriter for Syndicate 1796 said: “We’ve been working with Parsyl to solve the challenges of insuring health commodities in emerging markets for nearly two years. The unique combination of a private/public collaboration, technology from Parsyl and risk management from market leaders makes up the DNA of the GHRF. Ultimately these elements have enabled the long-term provision of insurance for this vital supply chain.” (Parsyl participated in a Lloyd’s Lab innovation accelerator in 2019).

“We’re very proud to be part of this extraordinary collaboration, harnessing AXA XL’s global risk consulting expertise to advise on the safe distribution of vaccines and AXA’s global footprint to provide emerging markets with local insurance cover,” according to Sean McGovern, CEO, UK & Lloyd’s market at AXA XL.

Kevin Rimmer, head of Cargo at McGill and Partners said: “In the midst of a global pandemic, this bold initiative demonstrates the insurance industry’s agility to react and create a vaccine distribution solution at scale and speed. We are delighted to have architected the critical development of the Global Health Risk Facility (GHRF) which is openly available to all clients and brokers worldwide.” McGill and Partners served as the broker on the re/insurance placements.

“Transporting billions of live vaccines around the world at speed will be a hugely complex process, which requires collaboration across many industries and governments,” said Shaun Crawford, global industry leader, EY. (EY has supported the initiative to establish the insurance entity at Lloyd’s and the design of the RMA).

“This GHRF initiative demonstrates the importance of aligning market-leading innovation in the global life sciences industry with the deep-rooted insurance expertise of the UK specialty market and governments around the world to respond to this most pressing global health challenge. We are proud to play our part in supporting the world’s largest vaccination campaign,” Crawford continued.

* The GHRF and Syndicate 1796 have been developed by Parsyl in close partnership with Ascot Underwriting as the managing agent, and in cooperation with AXA XL, McGill and Partners and Lloyd’s of London. Participating insurers include Ascot, AXA XL, Beazley, Chubb, Talbot, QBE, Tokio Marine Kiln and Aegis. Reinsurers to Syndicate 1796 include Convex, Canopius, Hamilton and RenaissanceRe, among others. All business for the GHRF will be originated through Parsyl Insurance, a Lloyd’s coverholder.

Source: Insurance Journal

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