Hannover Re CEO Jean-Jacques Henchoz has said that the (re)insurance industry does not possess the capital and should not be expected to shoulder a systemic global risk like the COVID-19 pandemic.
According to a report Mr Henchoz told newspaper Neue Zürcher Zeitung (NZZ), “We cannot diversify it as a risk.”
He said other approaches to mitigate pandemic risk would have to be explored by governments rather than relying fully on the private (re)insurance market.
Mr Henchoz said partnerships between the state and private sector are necessary and there have been ‘encouraging debates’ between governments and industry representatives.
Website www.artemis.bm quotes Mr Henchoz as saying “One option is pool solutions, similar to terrorist risk cover, as developed after the September 11, 2001 attacks on America.”
“Another option would be a compulsory pandemic insurance, set up as a mixed-economy organisation,” he said, comparing it to the one that already exists in Switzerland with natural damage insurance.
Hannover Re, however, also believes that countries need to coordinate solutions on an international level. He urged the European states to work more closely with the European Commission.
Mr Henchoz told NZZ that capital market solutions could represent another option for dealing with large risks such as pandemics but warned that capital and risk appetite in this area are currently limited.