Featured Product

    EIOPA on Options for Shared Resilience Solutions for Pandemic Risk

    July 27, 2020

    EIOPA is seeking views on an issues paper highlighting options for developing shared resilience solutions to address business interruption risk in the context of a pandemic. The current pandemic has shown that there is a significant protection gap for the non-damage business interruption insurance and that there exists a need to improve access to data and ensure proper modeling of non-damage business interruption risks associated with pandemics. The solutions to address this will require both public- and private-sector involvement and build on the key elements of proper risk assessment, measures for risk prevention and adaptation, appropriate product design, and risk transfer. The paper does not aim to set out a specific course of action, but highlights options that could be explored at the national and European levels. The comment period for this paper ends on September 25, 2020.

    The paper recognizes that private insurance solutions alone will not be sufficient to protect society against the financial consequences of future pandemics. The options included in the paper are different insurance models and coverage—for example, whether cover should be mandatory and whether payouts should be based on a pre-agreed parameter or index. The options also include different ways the public and private sectors could work together by establishing an EU expert group for data sharing and risk modeling and creating a platform for public and private coordination on prevention measures. Different potential roles are considered for how EU can contribute toward solutions. The following four principles would underlie the development of a shared resilience solution for pandemic risks:

    • A shared resilience solution would require the sharing of costs and responsibilities across the relevant parts of the private and public sector in a meaningful manner (“skin in the game”)
    • An efficient shared resilience solution will require an element of central coordination across public and private entities
    • Any solution involving public and private sector would be conditional on implementing efficient and effective prevention and adaptation measures
    • A shared resilience solution can only insure against a portion of the economic costs

    Looking ahead, and building on the lessons learned from the current COVID-19 pandemic, further analysis on the treatment of systemic risks may prove of great relevance. Based on the elements and principles of a shared resilience solution as set out in this paper, the opportunities for risk assessment, risk prevention, and risk transfer measures for systemic risks could be further explored, beyond the pandemics and non-damage business interruption insurance. Such analysis could address the question whether a multi-peril approach, covering losses caused by pandemic, cyber, climate change, and terrorism events could offer better diversification effects, ultimately improving the risk-bearing capacity and effectiveness of society. One possibility would be to establish a platform of private and public authorities. Any solution to these systemic risks should be inherently part of the sustainable economic recovery plans and reforms for green, digital, and social resilience. In developing this paper, EIOPA consulted the insurance and reinsurance industry as well as commercial insurance buyers and insurance brokers and distributors.

     

    Related Links

    Keywords: Europe, EU, Insurance, COVID-19, Climate Change Risk, Systemic Risk, Pandemic Risk, Pandemic Insurance, Cyber Risk, Share Resilience Solutions, EIOPA

    Featured Experts
    Related Articles
    News

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423