This first report in our research series on pandemics and insurance explores, in number terms, the capacities of insurers to absorb pandemic-related costs. Encouragingly, research findings indicate that pandemics on the scale of, and similarly lethal to, COVID-19 pose no fundamental insurability challenges for health and life insurers. In the commercial insurance arena, however, the uncontrollable aggregation and correlation elements of pandemic risk defy insurability.

COVID-19’s present and foreseeable social and economic impacts are a call to invigorate and recalibrate discussions to address social inequality and explore new approaches driven by public-private partnerships.   Private insurance, though not designed to address social inequality per se, can offer financial relief to people or households when calamities strike. Such shocks hit the poorest the hardest.

The COVID-19 crisis is a stark reminder of other looming threats, physical and digital, with the potential to cause extreme disruption. In an insurance context, the pandemic underscores the importance of clear policy wording, as ambiguity can cause reputational damage to insurance companies and resource-intensive litigation.