Evaluating the Role of Insurance in Managing Risk of Future Pandemics

26 Pages Posted: 28 Jun 2021 Last revised: 27 Aug 2022

See all articles by Howard Kunreuther

Howard Kunreuther

National Bureau of Economic Research (NBER); University of Pennsylvania - Wharton Risk Management and Decision Processes Center

Jason Schupp

Centers for Better Insurance, LLC

Multiple version iconThere are 2 versions of this paper

Date Written: June 2021

Abstract

COVID-19 has demonstrated the challenges that policymakers, insurers, businesses, and employees face when disaster assistance programs are developed after the pandemic has already started. There is now an opportunity to design and implement effective and efficient solutions to manage the financial risks of a future pandemic. This paper suggests a practical framework, informed by the recent experience with COVID-19, for defining a meaningful role for insurance in managing business interruption (BI) and other risks from future pandemics. Policymakers, regulators, businesses, and other stakeholders interacting with representatives from the insurance industry can assist in defining its role in providing protection against the financial consequences of future pandemics. This framework, while designed for dealing with future pandemics, may be applied to other catastrophic and systemic risks.

Suggested Citation

Kunreuther, Howard C. and Kunreuther, Howard C. and Schupp, Jason, Evaluating the Role of Insurance in Managing Risk of Future Pandemics (June 2021). NBER Working Paper No. w28968, Available at SSRN: https://ssrn.com/abstract=3875135

Howard C. Kunreuther (Contact Author)

National Bureau of Economic Research (NBER)

University of Pennsylvania - Wharton Risk Management and Decision Processes Center ( email )

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Jason Schupp

Centers for Better Insurance, LLC

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