Marsh and Citi have announced the placement of a bespoke risk mitigation structure on behalf of Gavi, the Vaccine Alliance, to cover the risks associated with governments that are self-funding COVID-19 vaccine procurement through the COVAX Facility – in turn facilitating speedy and equitable distribution of vaccines globally.
The unique structure will enable Gavi to pre-purchase vaccines in bulk, and provides cover against the risk of non-payment by 21 countries across Africa, the Americas, Asia and Continental Europe.
The policy is underwritten by AXA XL, Chubb, Liberty Specialty Markets, Sovereign Risk Insurance, Swiss Re Corporate Solutions and Tokio Marine HCC.
Stephen Kay, political risk leader, Marsh said: “Striving for greater global vaccine equity by increasing vaccination rates worldwide will not only help countries recover faster from the impact of the pandemic, but may also reduce the risk of new variants that come from high levels of community transmission. This innovative structure will hasten that process by allowing Gavi to procure and distribute vaccines more speedily and with greater financial confidence.”
Assietou Diouf, Gavi’s Managing Director of Finance and Operations, said: “An initiative like COVAX requires a risk mitigation structure to match its scale, complexity and ambition. This new structure will further strengthen the foundation of COVAX, which is the best mechanism the world has to bring an end to the acute phase of the COVID-19 pandemic.”
Jay Collins, vice-chairman of Banking, Capital Markets and Advisory at Citi, and lead banker for the Citi team which acts as financial and risk adviser to Gavi, said: “We are proud to have worked with Gavi, Marsh and the world’s leading insurance companies to design and implement this risk mitigation strategy for the COVAX Facility. The structure allows COVAX to accelerate further vaccine purchase agreements for the world. This public private partnership is a further example of the innovative steps the COVAX Facility is taking to achieve its mission.”
The identities of the countries covered and other aspects of the policy are not being disclosed.