Aon and Munich Re Launch Pandemic Reinsurance in Indonesia and Philippines
And Munich Re have launched pandemic reinsurance for businesses in Indonesia and the Philippines, with a focus on hospitality losses that standard property and…
Aon and Munich Re launched pandemic reinsurance in Indonesia and the Philippines to cover business interruption losses without physical damage, a risk conventional property policies often exclude. The product is aimed particularly at the hospitality sector, where an outbreak can interrupt operations even when insured property remains undamaged.
The arrangement combines indemnity-based coverage with parametric triggers, backed by Munich Re’s reinsurance capital, pricing expertise and policy wordings. Aon and Munich Re described it as a first-of-its-kind solution designed to provide dedicated pandemic protection in both markets.
For hotels and other hospitality businesses, the distinction matters: a pandemic can disrupt revenue without causing physical damage that would activate standard property and casualty cover. The new product is intended to address that protection gap, subject to the applicable policy terms.
How does the pandemic reinsurance work?
The coverage combines indemnity protection with parametric triggers. Aon said the structure is intended to give clients greater clarity about how protection responds to pandemic-related losses.
Aon gains access to dedicated, highly rated reinsurance capacity for hospitality risks, while Munich Re supplies the capital, pricing expertise and policy wordings. Teams from both companies in Indonesia and the Philippines developed the arrangement after identifying specific coverage requirements among clients in those markets.
The practical concern extends beyond hospitality. Pandemic-related interruptions can disrupt trade, supply chains, tourism, public services and business operations, creating losses even when there is no physical damage to insured property. Conventional property and casualty policies generally exclude many of these exposures, while some specific protection is available through medical and travel insurance.
That gap can leave companies exposed to lost income during an outbreak, despite having insurance for physical damage. The new arrangement creates a dedicated option for businesses in Indonesia and the Philippines, while addressing a risk that can affect multiple businesses and geographical markets at once.
Why are insurers targeting pandemic losses?
Soeren Soltysiak, Aon’s CEO of Asia, Reinsurance Solutions, said the COVID-19 pandemic revealed the scale of uninsured business interruption losses that occur without physical damage.
“By combining specialist reinsurance capacity with a solution specifically designed for pandemic-related losses, we will help clients achieve greater clarity and confidence in how they can protect their balance sheets against possible future events,” Soltysiak said.
Hitesh Kotak, Munich Re’s CEO for Asia, said pandemic risk remains a major protection gap for economies across the region. He said the product gives organizations in Indonesia and the Philippines greater access to cover for pandemic-related disruption and supports recovery and growth following future public health events.
Dr. Gunther Kraut, Munich Re’s global head of Epidemic Risk Solutions, said pandemic exposures require robust approaches to risk sharing and capital deployment. He also said specialist insurance solutions are needed to address the accumulation of risks across markets.
The policy is focused on pandemic-related business interruption losses, including those that occur without physical damage to insured property.
