LONDON (Reuters Breakingviews) – Corona Capital is a daily column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.
LATEST
– Pandemic insurance
– Oil demand
STATE SUPPORT. Lloyd’s of London is turning over every stone to find solutions for the next pandemic. The 334-year-old insurance market is working on a new breed of programmes Restart Re and Recover Re to allow insurers to spread the risk of protecting businesses for lost revenue due to sudden crises, like virus lockdowns. Pandemic catastrophe bonds are another option.
There’s definitely a need for new solutions. Insurers’ refusal to pay out on business interruption cover after Covid-19 left many small companies in the lurch. The snag is that the cost of covering the risk of further lockdowns is hard to gauge, and likely extremely expensive. Catastrophe pandemic bonds sound good, but the market for such tools may be limited and insurance-linked securities can be unpredictable. Even Lloyd’s Chief Executive John Neal acknowledges that getting a large pandemic reinsurance programme off the ground will need governments to take a lot of the risk. (By Aimee Donnellan)
EMISSION CRITICAL. Sputtering oil demand and falling coal use mean energy-related carbon dioxide emissions may have already peaked in 2019, according to new research from Norwegian consultant DNV GL. Great: except it also points out that despite the virus-related drop in emissions this year, the same is needed every year to prevent global warming rising by a damaging 1.5 degrees Celsius above pre-industrial levels.
The extra year of breathing space enabled by 2020’s 8% dip in emissions remains handy: it offsets the time wasted by the virus-related cancellation of this year’s COP26 conference, at which national emissions reductions targets were supposed to be nailed down. But it’s more and more obvious that a green post-Covid recovery is not just vital for the next decade, but for the next century. (By George Hay)
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Breakingviews – Corona Capital: Crisis insurance, Global warming – Reuters
