Most insurance experts believe that legislative proposals that would require insurers to cover claims for breaches in companies stemming from COVID-19 related closures, even if insurance excludes pandemic-related losses, threaten the insurance industry's solvency. This is the finding of a survey conducted by the Wisconsin School of Business and the Center for Insurance Policy and Research by the National Association of Insurance Commissioners (NAIC).
The survey also found that most experts believe that the private
the market will have a difficult time effectively delivering BI coverage
pandemics, given the systemic, correlated and non-diversifiable nature of
Many of the survey investigators felt that only the federal government can
provide coverage for correlated risks as it can spread the cost through
taxation, long-term borrowing and deficit financing. But if it is provided by
only the federal government or the private market, pricing and
The affordable price of the cover was suggested to be a problem for both.
Most said they believe the private market can deliver BI
pandemic coverage with an effective federal partnership. Some questioned
whether the Terrorism Risk Insurance Program (TRIP) is a good model for
pandemic insurance, given the similarities between the pandemic and terrorism
The full survey can be found here.