Pandemic insurance through pandemic partnership bonds: A fully funded insurance solution in a public private partnership

Helmut Gründl and Fabian Regele

No 86, SAFE Policy Letters from Leibniz Institute for Financial Research SAFE

Abstract: This Policy Letter outlines a pandemic insurance solution through a pandemic-related 'Insurance Linked Bond'. It would be originated by governments, with a principal amount to cover significant costs resulting from a pandemic. These bonds, which would be traded on a secondary market, generate a risk-adequate return for private and institutional investors that is financed through the insurance premiums paid by the public domain. In case of a pre-defined pandemic trigger event, the principal of the bond becomes available for the originating governments to cover pandemic-related costs. Through this approach, governments can insure themselves against future pandemic-related risks, while funding comes primarily from private and institutional investors.

Keywords: Covid-19-Crisis; catastrophe bond; public private partnership; pandemic insurance (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-hea and nep-ias
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