Government action on future insurance schemes to protect against pandemics has slowed as countries around the world continue to deal with ongoing COVID-19 impacts, The Geneva Group MD Jad Ariss says.

“When COVID-19 hit, governments moved quickly to try and define appropriate future pandemic risk insurance schemes,” Mr Ariss says in a report by the research group on potential public-private solutions.

“These efforts may have been premature. As the current pandemic persists, many governments have postponed deciding the right solution until the full context comes to light.”

The report examines direct insurance, reinsurance, social insurance and post-event protection options, building on work last year that explained why pandemics cannot be covered by the private insurance industry.

Mr Ariss says COVID-19 is still omnipresent, but society will have a clearer, more informed view on how to prepare for future pandemics once it’s reined in.

“It’s a tragedy that businesses, particularly SMEs, have suffered so much financial loss during the pandemic as a result of the lockdowns, which were beyond their control,” he says.

“Governments and insurers must work together on how to close the massive protection gap exposed by COVID-19, with governments as the leading players.”

Head of Research and Foresight Kai-Uwe Schanz says distributing cash after an event, as many governments did for COVID-19, is the least effective of the four options.

“For the other schemes, deciding whether participation is mandatory or voluntary, as well as the role of insurers in pricing and offering coverage, are critical considerations,” he says.

The Geneva Association says COVID-19 has illustrated that pandemic-related business interruption is directly linked to the decisions of governments to implement lockdown measures, making it impossible for insurers to model and price such a risk.