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Law360, London (December 15, 2020, 11:45 AM GMT) -- Lloyd's of London said on Tuesday that it has launched insurance cover for the global transportation of the COVID-19 vaccine with an insurance technology company, with $26.7 million in backing from the U.S. International Development Finance Corporation.
The new product, named the Global Health Risk Facility, will make "available billions of dollars of insurance coverage" to protect against losses when transporting the vaccine and other medical products to developing countries, he specialist insurance market said.
The COVID-19 vaccine developed by Pfizer and BioNTech needs to be stored at temperatures of minus 70 C, which poses a logistics challenge, particularly when transporting it to developing countries.
"Distributing cold chain vaccines and pharmaceuticals safely around the world is extraordinarily complex, and they can easily spoil if not properly maintained, especially at the last mile of transit where infrastructure is weak," Lloyd's said.
LLoyd's gave the green light in July to Syndicate 1796, managed by a U.S. startup company, Parsyl Inc., to underwrite the new cover. Denver-based Parsyl — a graduate of Lloyd's Lab, the market's insurance technology incubator project — provides risk management services for the marine cargo supply chain to insurers.
The corporation said the insurance cover would provide risk management for the project and protect the "financial investments made to supply and distribute them at a global level."
The $26.7 million loan from the Development Finance Corporation will help to fund the new syndicate, Lloyd's said on Tuesday, which will allow cover to be "cost-effective."
"We believe this innovative insurance industry collaboration can set up a new model for addressing future global health challenges," Adam Boehler, chief executive of the DFC, said.
Syndicate 1796, named after the year in which the smallpox vaccine was developed, was launched using Lloyd's new "syndicate in a box" process, designed to encourage new entrants to the market by cutting red tape and costs. Ascot Group, a Lloyd's managing agency, will act as managing agent for the syndicate and the vaccine insurance.
The cover will also be backed by a so-called risk management accelerator, funded separately by donors and other syndicates: specialist insurer AXA XL will provide a service to transportation companies, analyzing the supply chain for risks and conducting surveys of virus storage locations.
--Editing by Ed Harris.
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