Chair RISK – Project “Pandemic and Business Interruption Risk Coverage”
Extending coverage through financial markets.
↘ While the spread of the Covid-19 virus was primarily a health crisis, it had also a heavy impact on economic activity: in France, GDP fell by 8.30% in 2020. This fall is mainly explained by the interruption of activities ordered by the government to limit the spread of the virus. With few exceptions, these interruptions were not covered by insurance policies.
Indeed, the insurance industry, even when supported by reinsurance, is not in a position to respond to claims alone. The systemic nature of the risk hinders the application of the mutualisation principles used for non-catastrophic risks.
However, a pandemic is a catastrophe. And insurers and reinsurers know, since the mid-1990s, how to turn to the financial markets to complete the coverage of disasters, particularly natural disasters, using securitisation. Catastrophe bonds, catastrophe options and swaps allow the underwriter (a state vulnerable to earthquakes, an insurer exposed to various major risks) to gain on the financial markets at the same time as it loses on the physical market following a natural event for example.
↘ BETA is the leading research centre in economics and management in the Grand-Est region. It brings together researchers from all fields of economics, and is particularly well known in the field of risk management and the study of individual behaviour in the face of risk. It relies on a team of about ten researchers recognised in the field, and an experimental economics laboratory.
André Schmitt and Sandrine Spaeter have started a research project on the topical issue, very often debated since mid-2020, of the coverage of business losses following the administrative decisions taken by governments in this health, social and economic crisis of the Covid-19.
↘ Work in progress
Schmitt A. and Spaeter S., 2021, “When the Pandemic Business Interruption Risk Becomes Insurable Thanks to Double Triggered Cat Bonds”, mimeo BETA, April.
Spaeter S., 2021, “How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage”, mimeo BETA, April.
Become a sponsor and support this project!
In order to contribute and to count in these important fields, which will be source of major stakes in the future, the BETA laboratory of the University of Strasbourg wishes to increase the impact and the research opportunities of this research team.
By associating yourself with this project as a sponsor, we offer you the opportunity to:
- Benefit from the perspectives on the new roles of insurers and finance.
- Benefit from the recognition programme offered to sponsors of the University of Strasbourg.
Project leaders:
Sandrine SPAETER-LOEHRER, university professor | spaeter@unistra.fr
André SCHMITT, lecturer | a.schmitt@unistra.fr
Fondation Université de Strasbourg | fondation@unistra.fr
03 68 85 13 10
Proposals and solutions
Such a strategy cannot be duplicated identically for the risk of a pandemic disaster; among other obstacles, let us mention the moral hazard and anti-selection, which are very present, and the strong correlation between the risk of a pandemic (in fact the consequences of governmental decisions taken to combat the pandemic) and the financial markets. This research programme, which started in autumn 2020, aims to propose an alternative and hybrid system for covering the risk of business losses due to a pandemic, by combining different coverage instruments.
The support of insurance and reinsurance companies and, more generally, of risk management companies will allow for a better understanding of the risk of a pandemic and its insurability by making statistical data available and by financing the human resources required to process them. Ultimately, the aim is to offer a global pandemic risk management system that satisfies all the players involved: insurance and reinsurance companies, financial investors, the State, companies exposed to this risk and citizens.
Self-insurance (via market diversification, tax exemption for pandemic reserves, creation or leasing of captives), traditional insurance and reinsurance, and the construction of multi-trigger pandemic bonds are analysed in terms of opportunity, transaction and risk management costs. The issue of regional, national and international governance of an integrated pandemic risk management system is also addressed.
What will your donation be used for?
- To support master’s research internships.
Extending coverage through financial markets.
↘ While the spread of the Covid-19 virus was primarily a health crisis, it had also a heavy impact on economic activity: in France, GDP fell by 8.30% in 2020. This fall is mainly explained by the interruption of activities ordered by the government to limit the spread of the virus. With few exceptions, these interruptions were not covered by insurance policies.
Indeed, the insurance industry, even when supported by reinsurance, is not in a position to respond to claims alone. The systemic nature of the risk hinders the application of the mutualisation principles used for non-catastrophic risks.
However, a pandemic is a catastrophe. And insurers and reinsurers know, since the mid-1990s, how to turn to the financial markets to complete the coverage of disasters, particularly natural disasters, using securitisation. Catastrophe bonds, catastrophe options and swaps allow the underwriter (a state vulnerable to earthquakes, an insurer exposed to various major risks) to gain on the financial markets at the same time as it loses on the physical market following a natural event for example.
↘ BETA is the leading research centre in economics and management in the Grand-Est region. It brings together researchers from all fields of economics, and is particularly well known in the field of risk management and the study of individual behaviour in the face of risk. It relies on a team of about ten researchers recognised in the field, and an experimental economics laboratory.
André Schmitt and Sandrine Spaeter have started a research project on the topical issue, very often debated since mid-2020, of the coverage of business losses following the administrative decisions taken by governments in this health, social and economic crisis of the Covid-19.
↘ Work in progress
Schmitt A. and Spaeter S., 2021, “When the Pandemic Business Interruption Risk Becomes Insurable Thanks to Double Triggered Cat Bonds”, mimeo BETA, April.
Spaeter S., 2021, “How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage”, mimeo BETA, April.
Become a sponsor and support this project!
In order to contribute and to count in these important fields, which will be source of major stakes in the future, the BETA laboratory of the University of Strasbourg wishes to increase the impact and the research opportunities of this research team.
By associating yourself with this project as a sponsor, we offer you the opportunity to:
- Benefit from the perspectives on the new roles of insurers and finance.
- Benefit from the recognition programme offered to sponsors of the University of Strasbourg.
Project leaders:
Sandrine SPAETER-LOEHRER, university professor | spaeter@unistra.fr
André SCHMITT, lecturer | a.schmitt@unistra.fr
Fondation Université de Strasbourg | fondation@unistra.fr
03 68 85 13 10
Proposals and solutions
Such a strategy cannot be duplicated identically for the risk of a pandemic disaster; among other obstacles, let us mention the moral hazard and anti-selection, which are very present, and the strong correlation between the risk of a pandemic (in fact the consequences of governmental decisions taken to combat the pandemic) and the financial markets. This research programme, which started in autumn 2020, aims to propose an alternative and hybrid system for covering the risk of business losses due to a pandemic, by combining different coverage instruments.
The support of insurance and reinsurance companies and, more generally, of risk management companies will allow for a better understanding of the risk of a pandemic and its insurability by making statistical data available and by financing the human resources required to process them. Ultimately, the aim is to offer a global pandemic risk management system that satisfies all the players involved: insurance and reinsurance companies, financial investors, the State, companies exposed to this risk and citizens.
Self-insurance (via market diversification, tax exemption for pandemic reserves, creation or leasing of captives), traditional insurance and reinsurance, and the construction of multi-trigger pandemic bonds are analysed in terms of opportunity, transaction and risk management costs. The issue of regional, national and international governance of an integrated pandemic risk management system is also addressed.
What will your donation be used for?
- To support master’s research internships.
Extending coverage through financial markets.
↘ While the spread of the Covid-19 virus was primarily a health crisis, it had also a heavy impact on economic activity: in France, GDP fell by 8.30% in 2020. This fall is mainly explained by the interruption of activities ordered by the government to limit the spread of the virus. With few exceptions, these interruptions were not covered by insurance policies.
Indeed, the insurance industry, even when supported by reinsurance, is not in a position to respond to claims alone. The systemic nature of the risk hinders the application of the mutualisation principles used for non-catastrophic risks.
However, a pandemic is a catastrophe. And insurers and reinsurers know, since the mid-1990s, how to turn to the financial markets to complete the coverage of disasters, particularly natural disasters, using securitisation. Catastrophe bonds, catastrophe options and swaps allow the underwriter (a state vulnerable to earthquakes, an insurer exposed to various major risks) to gain on the financial markets at the same time as it loses on the physical market following a natural event for example.
↘ BETA is the leading research centre in economics and management in the Grand-Est region. It brings together researchers from all fields of economics, and is particularly well known in the field of risk management and the study of individual behaviour in the face of risk. It relies on a team of about ten researchers recognised in the field, and an experimental economics laboratory.
André Schmitt and Sandrine Spaeter have started a research project on the topical issue, very often debated since mid-2020, of the coverage of business losses following the administrative decisions taken by governments in this health, social and economic crisis of the Covid-19.
↘ Work in progress
Schmitt A. and Spaeter S., 2021, “When the Pandemic Business Interruption Risk Becomes Insurable Thanks to Double Triggered Cat Bonds”, mimeo BETA, April.
Spaeter S., 2021, “How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage”, mimeo BETA, April.
Become a sponsor and support this project!
In order to contribute and to count in these important fields, which will be source of major stakes in the future, the BETA laboratory of the University of Strasbourg wishes to increase the impact and the research opportunities of this research team.
By associating yourself with this project as a sponsor, we offer you the opportunity to:
- Benefit from the perspectives on the new roles of insurers and finance.
- Benefit from the recognition programme offered to sponsors of the University of Strasbourg.
Project leaders:
Sandrine SPAETER-LOEHRER, university professor | spaeter@unistra.fr
André SCHMITT, lecturer | a.schmitt@unistra.fr
Fondation Université de Strasbourg | fondation@unistra.fr
03 68 85 13 10
Proposals and solutions
Such a strategy cannot be duplicated identically for the risk of a pandemic disaster; among other obstacles, let us mention the moral hazard and anti-selection, which are very present, and the strong correlation between the risk of a pandemic (in fact the consequences of governmental decisions taken to combat the pandemic) and the financial markets. This research programme, which started in autumn 2020, aims to propose an alternative and hybrid system for covering the risk of business losses due to a pandemic, by combining different coverage instruments.
The support of insurance and reinsurance companies and, more generally, of risk management companies will allow for a better understanding of the risk of a pandemic and its insurability by making statistical data available and by financing the human resources required to process them. Ultimately, the aim is to offer a global pandemic risk management system that satisfies all the players involved: insurance and reinsurance companies, financial investors, the State, companies exposed to this risk and citizens.
Self-insurance (via market diversification, tax exemption for pandemic reserves, creation or leasing of captives), traditional insurance and reinsurance, and the construction of multi-trigger pandemic bonds are analysed in terms of opportunity, transaction and risk management costs. The issue of regional, national and international governance of an integrated pandemic risk management system is also addressed.
What will your donation be used for?
- To support master’s research internships.
Extending coverage through financial markets.
↘ While the spread of the Covid-19 virus was primarily a health crisis, it had also a heavy impact on economic activity: in France, GDP fell by 8.30% in 2020. This fall is mainly explained by the interruption of activities ordered by the government to limit the spread of the virus. With few exceptions, these interruptions were not covered by insurance policies.
Indeed, the insurance industry, even when supported by reinsurance, is not in a position to respond to claims alone. The systemic nature of the risk hinders the application of the mutualisation principles used for non-catastrophic risks.
However, a pandemic is a catastrophe. And insurers and reinsurers know, since the mid-1990s, how to turn to the financial markets to complete the coverage of disasters, particularly natural disasters, using securitisation. Catastrophe bonds, catastrophe options and swaps allow the underwriter (a state vulnerable to earthquakes, an insurer exposed to various major risks) to gain on the financial markets at the same time as it loses on the physical market following a natural event for example.
↘ BETA is the leading research centre in economics and management in the Grand-Est region. It brings together researchers from all fields of economics, and is particularly well known in the field of risk management and the study of individual behaviour in the face of risk. It relies on a team of about ten researchers recognised in the field, and an experimental economics laboratory.
André Schmitt and Sandrine Spaeter have started a research project on the topical issue, very often debated since mid-2020, of the coverage of business losses following the administrative decisions taken by governments in this health, social and economic crisis of the Covid-19.
↘ Work in progress
Schmitt A. and Spaeter S., 2021, “When the Pandemic Business Interruption Risk Becomes Insurable Thanks to Double Triggered Cat Bonds”, mimeo BETA, April.
Spaeter S., 2021, “How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage”, mimeo BETA, April.
Become a sponsor and support this project!
In order to contribute and to count in these important fields, which will be source of major stakes in the future, the BETA laboratory of the University of Strasbourg wishes to increase the impact and the research opportunities of this research team.
By associating yourself with this project as a sponsor, we offer you the opportunity to:
- Benefit from the perspectives on the new roles of insurers and finance.
- Benefit from the recognition programme offered to sponsors of the University of Strasbourg.
Project leaders:
Sandrine SPAETER-LOEHRER, university professor | spaeter@unistra.fr
André SCHMITT, lecturer | a.schmitt@unistra.fr
Fondation Université de Strasbourg | fondation@unistra.fr
03 68 85 13 10
Proposals and solutions
Such a strategy cannot be duplicated identically for the risk of a pandemic disaster; among other obstacles, let us mention the moral hazard and anti-selection, which are very present, and the strong correlation between the risk of a pandemic (in fact the consequences of governmental decisions taken to combat the pandemic) and the financial markets. This research programme, which started in autumn 2020, aims to propose an alternative and hybrid system for covering the risk of business losses due to a pandemic, by combining different coverage instruments.
The support of insurance and reinsurance companies and, more generally, of risk management companies will allow for a better understanding of the risk of a pandemic and its insurability by making statistical data available and by financing the human resources required to process them. Ultimately, the aim is to offer a global pandemic risk management system that satisfies all the players involved: insurance and reinsurance companies, financial investors, the State, companies exposed to this risk and citizens.
Self-insurance (via market diversification, tax exemption for pandemic reserves, creation or leasing of captives), traditional insurance and reinsurance, and the construction of multi-trigger pandemic bonds are analysed in terms of opportunity, transaction and risk management costs. The issue of regional, national and international governance of an integrated pandemic risk management system is also addressed.
What will your donation be used for?
- To support master’s research internships.
Extending coverage through financial markets.
↘ While the spread of the Covid-19 virus was primarily a health crisis, it had also a heavy impact on economic activity: in France, GDP fell by 8.30% in 2020. This fall is mainly explained by the interruption of activities ordered by the government to limit the spread of the virus. With few exceptions, these interruptions were not covered by insurance policies.
Indeed, the insurance industry, even when supported by reinsurance, is not in a position to respond to claims alone. The systemic nature of the risk hinders the application of the mutualisation principles used for non-catastrophic risks.
However, a pandemic is a catastrophe. And insurers and reinsurers know, since the mid-1990s, how to turn to the financial markets to complete the coverage of disasters, particularly natural disasters, using securitisation. Catastrophe bonds, catastrophe options and swaps allow the underwriter (a state vulnerable to earthquakes, an insurer exposed to various major risks) to gain on the financial markets at the same time as it loses on the physical market following a natural event for example.
↘ BETA is the leading research centre in economics and management in the Grand-Est region. It brings together researchers from all fields of economics, and is particularly well known in the field of risk management and the study of individual behaviour in the face of risk. It relies on a team of about ten researchers recognised in the field, and an experimental economics laboratory.
André Schmitt and Sandrine Spaeter have started a research project on the topical issue, very often debated since mid-2020, of the coverage of business losses following the administrative decisions taken by governments in this health, social and economic crisis of the Covid-19.
↘ Work in progress
Schmitt A. and Spaeter S., 2021, “When the Pandemic Business Interruption Risk Becomes Insurable Thanks to Double Triggered Cat Bonds”, mimeo BETA, April.
Spaeter S., 2021, “How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage”, mimeo BETA, April.
Become a sponsor and support this project!
In order to contribute and to count in these important fields, which will be source of major stakes in the future, the BETA laboratory of the University of Strasbourg wishes to increase the impact and the research opportunities of this research team.
By associating yourself with this project as a sponsor, we offer you the opportunity to:
- Benefit from the perspectives on the new roles of insurers and finance.
- Benefit from the recognition programme offered to sponsors of the University of Strasbourg.
Project leaders:
Sandrine SPAETER-LOEHRER, university professor | spaeter@unistra.fr
André SCHMITT, lecturer | a.schmitt@unistra.fr
Fondation Université de Strasbourg | fondation@unistra.fr
03 68 85 13 10
Proposals and solutions
Such a strategy cannot be duplicated identically for the risk of a pandemic disaster; among other obstacles, let us mention the moral hazard and anti-selection, which are very present, and the strong correlation between the risk of a pandemic (in fact the consequences of governmental decisions taken to combat the pandemic) and the financial markets. This research programme, which started in autumn 2020, aims to propose an alternative and hybrid system for covering the risk of business losses due to a pandemic, by combining different coverage instruments.
The support of insurance and reinsurance companies and, more generally, of risk management companies will allow for a better understanding of the risk of a pandemic and its insurability by making statistical data available and by financing the human resources required to process them. Ultimately, the aim is to offer a global pandemic risk management system that satisfies all the players involved: insurance and reinsurance companies, financial investors, the State, companies exposed to this risk and citizens.
Self-insurance (via market diversification, tax exemption for pandemic reserves, creation or leasing of captives), traditional insurance and reinsurance, and the construction of multi-trigger pandemic bonds are analysed in terms of opportunity, transaction and risk management costs. The issue of regional, national and international governance of an integrated pandemic risk management system is also addressed.
What will your donation be used for?
- To support master’s research internships.
