The business events industry has called for the creation of a government-led insurance scheme, possibly similar to one introduced by the UK, to help the sector cope with COVID disruptions. The Business Events Council of Australia (BECA) says it raised the suggestion in an online meeting last week with Minister for Trade, Tourism and Investment Dan Tehan.
The appeal for an insurance program is part of a bundle of targeted measures the peak body says is critical for the recovery of the sector, which has endured sudden event cancellations due to lockdown measures since the pandemic broke out. A Commonwealth Government-led event insurance scheme, achieved in partnership with state and territory governments, to cover for government-enforced cancellations and postponements resulting from COVID-19 restrictions will help restore the confidence of the sector.
“We’ve had conventions and exhibitions that are six, 12 months in the planning that get cancelled because a particular state closes its borders at a moment’s notice,” BECA Deputy Chairman Geoff Donaghy told insuranceNEWS.com.au. “So it causes an enormous amount of uncertainty, enormous amount of lack of confidence in going ahead and organising events.”
He says the creation of an insurance scheme with government backing is about “giving organisers of events the confidence to go ahead, knowing that they’re not going to get caught out”. The Insurance Council of Australia (ICA) says an independent study it recently commissioned reached the conclusion that insurance coverage for pandemics is not possible without government involvement. The study looked at options to mitigate the economic effects of future pandemics.
An ICA spokesman says the findings are largely consistent with those of the Organisation for Economic Co-operation and Development (OECD), which is also considering global solutions for pandemic funding and risk reduction. “The OECD has acknowledged the need for a global pandemic insurance solution and noted the private insurance industry is not in a position to do it alone,” the spokesman told insuranceNEWS.com.au.
“It highlighted that planning for future pandemics will require governments, the insurance industry and the private sector to work together on business interruption solutions.” The spokesman says insurance prices risk and given the risk that the pandemic continues to present, Australian insurers are now excluding disease coverage for pandemics.
Mr Donaghy says the UK Government’s insurance scheme to provide pandemic-related cancellation cover for live events provides an “excellent benchmark” for Australia to consider. The UK’s £750 million ($1.4 billion) Live Events Reinsurance Scheme is a partnership with the Lloyd’s market, with the government providing a guarantee to make sure insurers can offer products events companies need. Lloyd’s market insurers including Arch, Beazley, Dale, Hiscox and Munich Re are supporting the scheme, which will start from next month and run through to the following September.
“We believe something like that happening on the same level here in Australia will go an enormous way in getting us back on the road to recovery once we can put events back on safely, which we hope will be reasonably soon,” Mr Donaghy said. “So we really need to we need to de-risk, take the risk out of that and give event organisers the confidence to put their events back on.”