Wednesday, February 5, 2020

Reinsurance: "No coronavirus price response from World Bank’s pandemic cat bond yet"

We saw with Ebola that, even after both triggers—1) a minimum 250 victims and 2) the crossing of an international border—were reached, the World Bank's Pandemic Emergency Facility was very reluctant to declare the payout, eliciting some snark from yours truly:
"And if the cross-border contagion is reported on a day ending in a 'Y' all contracts will be null-and-void and coverage denied." 
Here's coronavirus from Artemis, February 3:
The developing and still worsening outbreak of a novel coronavirus in China has not yet caused any price response from the World Bank’s pandemic catastrophe bond transaction.

As we explained last week, the novel coronavirus (2019-nCoV) outbreak that began in the city of Wuhan in Hubei province China could pose a potential threat to the World Bank’s $320 million IBRD CAR 111-112 catastrophe bond that provides a source of insurance or reinsurance capital to back the Pandemic Emergency Financing Facility (PEF).

The coronavirus outbreak has the potential to become an eligible event under the terms of the World Bank’s pandemic catastrophe bond notes if the outbreak reaches pandemic levels and meets certain pre-defined criteria in terms of officially confirmed cases and fatalities....MUCH MORE
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