Atlas Magazine Mai 2020

2020, l’année du COVID-19

Since January 2020, a virus, a microscopic infectious particle, has been creating chaos for four months, depicting an apocalyptic picture: confined population, economic activity at a standstill, closed borders, grounded planes and powerless science. Adding color, the virus that is devastating the United States and Europe originated from China, a new contender for world leadership.
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In view of its position on the economic scene, the insurance business is once again asked to take on a risk of a catastrophic nature.

For the time being, the concept of insurability is the cornerstone around which the profession has been built and whereby the role of insurers is to manage a mutuality of homogeneous, random and quantifiable risks, with well-defined outlines and whereby claims are funded by premiums collected from members of the mutual fund. By no means, can there be any insurance without premium payment.

It is only obvious that for low frequency and extremely devastating risks, the insurance industry is not able to come up with a satisfactory response, nor can it provide capacity or a reasonable price. Neither an exclusion list nor a sudden price increase can solve the problem. The solution lies in a public-private partnership, which alone can provide some insurability to these scourges.

The establishment of specialized pools with the participation and the guarantee of the State is likely to enable insurers to safely manage these risks. The reinsurance business will be called upon to break down the engagements of the various actors.

A sign of the times, after having mastered personal and corporate risks of individuals, the industry has set foot on the era of extreme risks under the watchful eye of the regulator, very attentive to the solvency of the sector.

Atlas Magazine N°171, May 2020

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