Lloyd’s has announced the formation of a new specialised syndicate specifically set up to insure the storage and transportation of a COVID-19 vaccine once developed to emerging economies. The syndicate is being set up in combination with Parsyl Inc., a U.S. insurance technology company and and is also supported by Gavi, the Vaccine Alliance, an organisation dedicated to improving vaccine access in low-income countries, in partnership with Ascot and AXA XL, along with the broker McGill & Partners.
The syndicate, formed by following Lloyd's "Syndicate in a Box" ("SIAB") initiative will be called Syndicate 1796 in reference to the year Edward Jenner carried out the initial experiments for the smallpox vaccine. Vaccine delivery can be expensive to insure because underwriters are concerned about the risk of medicines being spoiled by excessive heat or cold.
The safe delivery of vaccines has been highlighted as often being difficult or costly, with some underwriters wary of the risks involved due to the highly temperature-sensitive nature of vaccines, with freezing being a particularly big risk.
John Neal, CEO of Lloyd’s of London, said in a statement: “There is broad consensus that life can only return to normality after a vaccine is developed, distributed and administered around the world. Lloyd’s has an important role to play in insuring the many risks associated with this global medical response and we are delighted to approve a new innovative syndicate that will provide effective cover for local vaccine distribution supply chains. This unique partnership is a real demonstration of the value and ingenuity the Lloyd’s market can bring to help address a global health emergency, as we share risk to support the brave efforts of those racing to develop and distribute a COVID-19 vaccine.”
The Syndicate forms the foundation of the new Global Health Risk Facility (GHRF) at Lloyd’s, which aims to provide comprehensive insurance and risk mitigation services to support the manufacturing and distribution of COVID-19 vaccine development efforts. It aims to start writing business from 1 October 2020. Refer to the Hampden June Newsletter for more information on the proposals.