Pandemic Emergency Financing: a first of its kind
In 2017, the World Bank and the World Health Organisation (WHO) designed an innovative response mechanism, the Pandemic Emergency Financing facility (PEF), featuring a USD 425 million parametric insurance coverage against infectious disease outbreaks. The PEF’s risk was placed with investors and re/insurers, with Swiss Re Capital Markets acting as joint structurer and sole bookrunner of the catastrophe bond. In April 2020, that coverage was triggered by the COVID-19 outbreak and paid out USD 196 million to the World Bank, the full amount allocated to this specific peril. The funds were used to support the public health response in the neediest countries, in collaboration with agencies such as the United Nations.
To learn more about how public-private partnerships (PPPs) such as the PEF can support the global response to pandemics, read the interview with Ivo Menzinger, Head Public Sector Solutions EMEA, in the Business Report 2020.