The Risk Management Society (RIMS) has circulated a letter to the US Department of the Treasury, Congress and the office of US president Donald Trump, requesting the creation of a pandemic risk insurance programme to accelerate economic recovery due to the fallout of the COVID-19 pandemic.
According to RIMS’ letter, a pandemic risk insurance programme would provide greater access to capital from lenders and establish a viable insurance market with sufficient, affordable capacity.
It would also create certainty for businesses and organisations of all sizes across the US and ensure that businesses can meet future pandemic events with greater resilience.
RIMS is calling on the risk management community to support its initiative by contacting local Congress members using a brief form that can be found here.
Prior to the letter, the society administered a survey to US risk professionals to ascertain their perspective on a federal pandemic insurance backstop.
The survey found that over 67 percent of risk professionals anticipated direct business interruption losses due to COVID-19, with 77 percent expecting the losses to be over $1 million and included in that group was 36 percent estimating losses to be more than $25 million.
Almost all, 91 percent, are supportive of a Terrorism Risk Insurance Act (TRIA) type federal loss-sharing programme for insurance claims relating to losses resulting from a pandemic or epidemic.
Finally, 65 percent of risk professionals said they would be willing to pay up to 5 percent more in premium.
RIMS president Laura Langone commented: “From our homes and our local communities to the boardrooms of some of the world’s largest corporations, COVID-19 has highlighted the need for strong risk management strategies to address interruptions resulting from a global pandemic.”
“Congress has done exceptional work by quickly introducing the CARES Act but there is still much work to be done. We look forward to the opportunity of collaborating with them to develop a sound pandemic programme that installs confidence in businesses and reinvigorates the economy,” she added.