Lloyd’s has today published proposals to accelerate societal and economic recovery from the impact of COVID-19.

It also announced the formation of a new Centre of Excellence, backed by £15m of seed capital, to increase the understanding and effective provision of cover for systemic catastrophic events.

The re/insurance market set out its suggestions in a report entitled: “Supporting global recovery and resilience for customers and economies: the insurance response to COVID-19”.

The proposals include three open source frameworks to support innovate partnerships and boost product development. The frameworks are called: ReStart, Recover Re and Black Swan Re.

ReStart is a possible non-damage business interruption solution, providing cover for loss of revenue without a physical trigger. It focuses on SMEs and creating certainty of coverage. It would pool limited capacity from Lloyd’s market participants without the need for government support.

Recover Re is an ‘after the event’ non-damage business interruption insurance product. It seeks to provide relief to policyholders with limited borrowing capacity, and to offer cover where it cannot be offered on commercial terms. It would be a multi-year or compulsory product, allowing insurers to recover their positions over time.

Black Swan Re is a reinsurance framework to provide reinsurance for commercial non-damage business interruption cover for black swan events through pooled industry capital, backed by a government guarantee. These events include another pandemic, disruption to the global supply chain and the interruption of critical infrastructure or utilities.

In addition to developing these three open source frameworks, Lloyd’s will also develop its new Centre of Excellence. It will improve the resource and capability available to better understand, model and create products that effectively support customers against systemic risks.

Lloyd’s chairman, Bruce Carnegie-Brown, said: “COVID-19 has demonstrated that there is much more we can do to support our customers by providing protection for the changing risks they face.”

He added: “This report identifies ways in which the insurance industry could work with governments to share risk and create a braver, more resilient world.”

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