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Monday, 29 April 2019 18:31

ALL ABOUT PANDEMIC CATASTROPHE BONDS

In previous articles, we discussed how communicable diseases and pandemics are (or are not) addressed in personal and commercialinsurance policies. Today, we’ll talk about pandemic catastrophe bonds.

The Ebola outbreak between 2014 and 2016 ultimately resulted in more than 28,000 cases and 11,000 deaths, most of them concentrated in the West African countries of Guinea, Liberia, and Sierra Leone.

The outbreak inspired the World Bank to develop a so-called “pandemic catastrophe bond,” an instrument designed to quickly provide financial support in the event of an outbreak. The World Bank reportedly estimated that if the West African countries affected by the Ebola outbreak had had quicker access to financial support, then only 10 percent of the total deaths would have occurred.

But wait, what are “catastrophe bonds” and what’s so special about a pandemic bond?

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http://www.iii.org/insuranceindustryblog/pandemic-catastrophe-bonds/