Withstanding a Crisis
In January, we reported on work being done by the Global Health Risk Facility, a public-private collaboration formed by Lloyd’s to help protect and support the storage and transportation of critical medical supplies, including temperature sensitive COVID-19 vaccines as they are rolled out across emerging markets globally.
Anchored by Syndicate 1796, the GHRF provides “all-risk” cargo coverage for the transportation and storage of all COVID-19 global health products to developing countries. The syndicate is operated by Parsyl Insurance, a tech-driven cargo insurer, with Ascot Group as the lead underwriter for the facility.
We spoke with Hank Watkins, president of Americas at Lloyd’s, for an update on the GHRF, other products that have been developed in response to the pandemic, and how Lloyd’s is addressing another challenging risk—climate change.
The past ten months have confirmed that effective vaccine distribution in the developing world is enormously challenging. While supply of Covid-19 vaccines to these areas is slowly improving, still only around 1% of people living in low-income countries have received even one dose of a Covid-19 vaccine. Where there is supply, there have been reports of vaccine stockpiles going unused or spoiling due to limitations in infrastructure.
Early customers have reported that what the GHRF uniquely provides is an insurer who grasps the risks associated with distribution in the developing world and develops solutions to help overcome those risks, strengthening these critical supply chains now and into the future.
COVID-19 has demonstrated that there is much more we can do to help businesses and communities reduce the risks they face, enable them to recover quickly, and provide them security to innovate and drive economic growth.
We recognize these challenges at Lloyd’s – and we recognize that no one person, organization, public or private sector entity has all the answers. We believe in the power of a collaborative approach and we know that Lloyd’s, with its unique position at the heart of the global (re)insurance sector, is extremely well placed to convene a global community of risk experts. We’ve done just that through our Futureset program, with the goal of sparking innovation, building understanding, and driving forward new solutions.
Throughout 2021, Futureset has explored the landscape of systemic risks, including lessons learned from the COVID-19 pandemic, as is examining the growing and global risks brought about by climate change. Futureset is convening global experts and partners with world class research organizations to create new and pioneering insights to drive sustainable solutions to current and future threats around the world.
The Sustainable Markets Initiative Insurance Task Force, convened by His Royal Highness (HRH) the Prince of Wales and chaired by Lloyd’s, is comprised of executives from many of the world’s largest insurance and reinsurance companies. It provides an influential platform for the sector to collectively advance the world’s progress towards a resilient, net-zero economy.
The task force is committed to helping create a more sustainable future through the risks we manage and the capital we invest. Currently the SMI is focused on: 1) driving insurance product and services innovation; 2) implementing sustainable processes across the insurance supply chain; 3) establishing a public-private disaster resilience, response, and recovery framework to help protect developing nations from the evolving economic and societal impacts of climate change; 4) developing a framework for accelerating and scaling sustainable investment by the global (re)insurance industry; and 5) defining the industry’s ability to enable multi-sector transitions.
Two areas of focus are wind turbines and hydrogen.
The global offshore wind market is evolving rapidly, and technology innovation will be key to driving growth as the sector matures. At Lloyd’s we believe the insurance market has an important role to play and a unique opportunity to further expand the coverage it provides to the offshore wind sector to meet the demand for additional insurance capacity, which is being driven by the rapid advancement of new offshore wind technology including turbines and floating wind technology.
Hydrogen fuel, although in its early stages, has the potential to become a key enabler in accelerating the decarbonization of a range of sectors, particularly now as the cost of renewable power has declined and electrolysis technology has improved. Consequently, one important area of focus for us is to support and accelerate the deployment of green hydrogen globally. The Lloyd’s market is already providing specialist insurance cover for safety risks associated with the transportation of hydrogen. Such cover will likely need to be scaled, particularly as the modification of existing gas transmission pipelines continues to gather pace.