LONDON (Reuters) - Lloyd’s of London and insurtech firm Parsyl have launched a programme to insure the distribution of COVID-19 vaccines in emerging markets as drugmakers race to address the biggest global logistical challenge since the Second World War.
The Global Health Risk Facility (GHRF), made up of 14 insurers and reinsurers, has been set up to address the challenges of transporting temperature-sensitive vaccines, and will be supported by $26.7 million in funding from the U.S International Development Finance Corporation, the companies said on Tuesday.
The DFC loan will be used to capitalize a new public-private Lloyd’s syndicate, which will start operating in January, and allow the GHRF to offer cost-effective insurance policies for shipments of vaccines and medical products to developing countries.
The GHRF will make available billions of dollars of insurance coverage, the companies said.
“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,” said Lloyd’s of London Chief Executive Officer John Neal.
Several vaccine programmes are now seen as promising, but budgetary constraints in paying for them and challenges in storage and distribution cloud the outlook for many emerging market economies such as Brazil, Mexico, Indonesia, India, Russia and parts of Africa.
COVID-19 vaccine distribution is a headache for insurers, who are concerned about the extra-cold temperatures required to transport vaccines such as the one developed by Pfizer and BioNTech, the first Western vaccine off the drawing board.
“We’ve had already prior to launch overwhelming demand from a variety of players - manufacturers to ministries of health and also logistics companies from every corner of the globe,” Ben Hubbard, chief executive at Parsyl told Reuters.
The international police organization Interpol has issued a global alert here to law enforcement across its 194 member countries warning them to prepare for organized crime networks targeting COVID-19 vaccines, both physically and online.
The GHRF programme will protect the quality of the goods and the financial investments made to supply and distribute them at a global level.
“It’s just ensuring that we can get the viable vaccine transported ... it’s around the robustness of the supply chain, which can be a challenge in some of these (emerging market) countries,” said Sean McGovern, chief executive, UK & Lloyd’s market at AXA XL.
As part of the programme, AXA XL is providing risk consulting services.
Syndicate 1796, named to mark the year physician Edward Jenner carried out his first experiments in what would become the smallpox vaccine, is the first public-private partnership to address a global health emergency in Lloyd’s 330-year history, the companies said.
Other participating insurers include Beazley, Chubb and QBE.
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