What is going to look like the future insurance pandemic ? - The Point

How to cover, in the future, companies face the risk of a pandemic ? This is the question on which board Bercy, while most insurance contracts have not played i

What is going to look like the future insurance pandemic ? - The Point

How to cover, in the future, companies face the risk of a pandemic ? This is the question on which board Bercy, while most insurance contracts have not played in the crisis and current health.

A working group led by the directorate general of the Treasury, composed of parliamentarians, insurers, and representatives of enterprises (Medef), CPME), has just made a report commissioned by Bruno Le Maire, Thursday, July 16. The idea is to engage the private sector to a solution where the State has played the role of insurer of last resort during the crisis with its plan exceptional part-time unemployment, guaranteed student loans and its reports massive social security contributions.

All those who dreamed of a turnkey solution will be disappointed. "He has no magic wand, of martingale," says-t-on the side of the ministry of Finance. The French natural disaster compensation, or property damage arising during the attacks does not seem to agree. "What we would like to compensate in the event of a pandemic or the consequences of the closures administrative, is far enough," says one at Bercy. In short, it is necessary to build a system from scratch, and each solution explored has its advantages and disadvantages.

The members of the working group have first stumbled on the question of what companies cover exactly. All businesses, only small, or, on the contrary, only the large ? The consequences of the confinement, was highly variable from one economic sector to another, a joining of forces between sectors is a viable option ?

Can we rely on the model contracts covering the operating loss that gave rise to compensation ? This seems very unlikely, as it would be necessary to calculate the gross profit lost by each company. "The problem is that it is not calculated immediately, it requires expertise and if everybody request at the same time, it is complicated," says one at Bercy. It would also be desirable to cover the estimated risk, in total, between 150 and 200 billion euros in the case of a national event, which would cause the insurance premiums are probably much too high. A solution could be to build a lump sum compensation.

Skepticism

another question that will arise is whether the new plan will be optional or compulsory for the companies. "We may have an extension of a mandatory warranty which is not, but is very widespread," as the fire cover, " says one at Bercy. Another option would be to ensure that companies who choose a guarantee against the loss of exploitation and are therefore already willing to pay.

At Bercy, it is quite skeptical about the possibility of sharing the risk of pandemic, as the impact between the sectors appears different. Another solution might be to offer tax incentives for each company to put the money aside in the event of a disaster.

A last question focuses on the new risks have to be taken into account. Should it be limited to pandemics, or should it also include other events that result in closures administrative rather general, for example in case of attack, closure of the air traffic or events on the public highway, which force some businesses to drop the curtain, as at the time of the movement of the yellow Vests ? "If it covers more things, presumably, this will be more expensive ", says there is still the ministry of Finance. And insurers and insurers will be less tempted to play their role if the list is not precisely defined in advance, as the cost would be a difficult pattern to them.

A solution in the finance bill 2021

On June 12, the French Federation of insurance has presented its own solution. It proposed to attach a cover pandemic risk coverage, fire (very common) or contracts insuring against loss from operations with property damage, which relate to about half of the French companies. The compensation would be flat and would not include neither the benefits nor the payroll. "Insurers and private reinsurers are willing to commit to such a guarantee 2 billion euros of annual capacity of compensation beyond which the State would take the relay by means of the CCR, the reinsurer to the public," wrote the federation.

What financial support to the implementation of a solution is the State is ready to put in place ? Financially, it will have an interest in a device exists, so you don't have to pay as much as now during the next pandemic. "If one starts in this business, explains it, it is so that it costs less to the State" which has already injected 57 billion of budget appropriations to deal with the Covid-19. But this can also lead to new spending sustainable so that pandemics should remain, it is to be hoped, of events very exceptional. For the moment, the ministry of Finance kick into touch. "Depending on the solution chosen, we will adapt the hose from the State. It is a question that arises from the central question of the benefits that companies want to subscribe to, and therefore, co-financing, " explains one.

The companies – or their representatives – will now be consulted during the month of August. The device used will be presented in the autumn, "probably" in the context of the finance bill 2021, know.

Updated Date: 16 July 2020, 13:33

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