In a recent interview with The Insurer, Guy Carpenter executives David Priebe, Chairman, and James Nash, International CEO, discuss the prospect of nation states coming together to provide a wider solution for cross-border threats like pandemics and cyber.
David Priebe noted the circumstances in each nation state are quite different even though COVID-19 is affecting everyone globally.
“Many of the measures that countries are taking are similar, but when it comes to how the underlying insurance industry has provided this coverage or not it varies by country,” Priebe said. “A localized country by country approach is also the case as it relates to action taken by governments. So I think the base solutions will be tailored to what is appropriate for that jurisdiction.”
A solution that can cross borders
But Priebe raised the possibility that further down the line countries could collaborate to create a superregional solution for systemic risks.
“The longer term issue is: because situations like pandemics and cyber see no boundaries or borders, can nation states come together to provide a wider solution or not?” he said.
This is one of the questions that is being explored by the Organization for Economic Co-operation and Development (OECD).
In June, the OECD held a roundtable that included almost 100 participants. Representing the insurance industry were Priebe giving the private sector perspective and Pool Re’s Julian Enoizi and CCR’s Laurent Montador giving a public sector viewpoint.
This followed the recent release of a paper by the OECD on the role that public-private partnerships could play, giving perspectives from policyholders, industry associations and regulators.
“They are making sure various perspectives are understood,” Priebe said. “So when the debate continues, either on a global or superregional level at least some of that information and the thought gathering process is already done.”
For now, countries are still in crisis mode tackling the COVID-19 crisis. At the same time, many countries are grappling with how to prepare for the next pandemic.
“I think initially each country is going to have to do what’s right for their own nation state, and it really comes down to funding,” said Priebe. “Who is going to fund this exposure? Clearly, given the scope and size of the exposure it is going to have to be predominantly, if not exclusively, all governmental and therefore the solutions will likely be local,” said Priebe.