Despite extensive warnings, Covid-19 has revealed both governments and businesses to be financially as well as medically unprepared for the risk of pandemic. Many firms are in extreme financial distress. Few business interruption insurance policies cover pandemic risks (with complaints about the reluctance of insurers to pay on these policies and claims being pursued through the courts). We need to be better prepared next time, with clearer ‘ex-ante’ arrangements for bearing the economic costs on business of public health measures. In this webinar, Alistair will address the issues involved in using state pooling of pandemic risks (similar to that for terrorism risks Pool-Re and flooding risk Flood-Re), distinguishing the role of insurance companies in assessing and processing claims from the risk absorption role which requires state participation. His discussion draws on lessons from past work on ‘disaster risk finance’, developed at the World Bank Global Facility for Disaster Protection and Recovery and elsewhere for earthquakes and other natural hazards.
Alistair Milne is Professor of Financial Economics at the School of Business and Economics, Loughborough University, He previously worked at Cass Business School, the Bank of England; the University of Surrey, London Business School, HM Treasury and for the Government of Malawi. He holds a PhD in economics from the London School of Economics.
He has conducted research for more than three decades on financial technology, bank capital and risk management, macroeconomics and financial regulation. He is the author of a comprehensive account of the 2007-08 global financial crisis “The Fall of the House of Credit”. His current research focus on the emerging innovations in banking and insurance including the application of AI, distributed ledger and related data technologies. He is the principal investigator of the TECHNGI project www.techngi.uk part of the £20mn Next Generation Services Research Challenge supported by the UK government’s Industrial Strategy Challenge Fund. He has also worked on disaster risk finance https://floodfinjava.lboro.ac.uk/ and this has led him to write on the potential application of insurance solutions to the current Covid-19 and future pandemics.