Is there a better way to insure businesses against the worst effects of any future pandemic? There must be, and TotusRe are trying to persuade the insurance sector to change, step up – and build it. Here’s the word;
We now know that there is undeniable demand for more locally produced goods, making adequate insurance for businesses more important than ever as they adjust their supply chains to focus more on UK-produced and developed products. However, in this time of need individuals and businesses risk finding themselves unable to acquire some vital insurance products such as business interruption.
The insurance sector is actively seeking to repair its damaged reputation and to tighten policy wordings to avoid future such damage. TotusRe sees this as is reactionary behaviour when many others in the market believe that proactive behaviour is desperately called for.
Co-Founder Liz Foster says: “As UK business look to re-establish a version of normal, we want to make sure they are adequately supported by the insurance industry to allow them the confidence to get back on track.
My request to professional bodies is to please use the powerful voice of your organisation to call upon the Chancellor to agree the TotusRe model, and thus support UK businesses as they move forward from COVID 19.”
Pandemic as a risk is included in the National Risk Register along with other category red risks such as cyber and climatic hazards. Any of these so-called ‘red zone’ hazards could once again create serious financial damage to business, to society and to the Government.
The solution lies in TotusRe which would create a private/ public structure, creating a fund which would remove the Government from finding itself as the insurer off last resort but with no income to fund its payments.
27 years ago, Pool Re was created to provide insurance against the risk of terrorism which had become otherwise uninsurable. Pool Re has created financial security, and therefore financial confidence, for society when acts of terrorism strike our community.
Flood Re now exists to support the UK when floods strike our community.
Whilst both Pool Re and Flood Re were created retrospectively, given the information within the National Risk Register TotusRe believes that we cannot waste any more time in developing a proactive solution before individuals and businesses find themselves at best unable to afford business interruption insurance, and at worst that the market will not provide such insurance.
TotusRe would sit at the centre of an insurance cell structure with each of the identified risks in an attached cell to include the risks of pandemic, terrorism, flood, Cyber and climate but with others too as found in the National Risk Register. This provides a single source of insurance with no ambiguity of policy wording or intent. Cover would continue even after an event which triggers payments.
Funding would come from policy holder contributions, insurer contributions, reinsurance and market retrocessionnaire (reinsurance of reinsurance). The Government provides a guarantee to pick up that which the cell cannot.