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New York, August 17, 2021
Marsh, the world’s leading insurance broker and risk advisor, together with leading global bank, Citi, today announced the placement of an innovative risk mitigation structure on behalf of Gavi, the Vaccine Alliance (Gavi), to cover the risk associated with a number of governments that are self-funding their coronavirus vaccine procurement through the COVAX Facility.
The innovative structure will enable Gavi to pre-purchase vaccines in bulk from manufacturers with greater confidence and facilitate the more rapid and equitable distribution of vaccines globally. The structure provides cover against the risk of non-payment by 21 countries across Africa, the Americas, Asia, and Continental Europe. Under the terms of the policy the identity of the countries covered, and other aspects of the policy, will not be disclosed.
The policy is underwritten by six leading insurers: 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, 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.”
COVAX, the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator , is co-led by CEPI, Gavi and WHO – working in partnership with developed and developing country vaccine manufacturers, UNICEF, the World Bank, and others. It is the only global initiative that is working with governments and manufacturers to ensure COVID-19 vaccines are available worldwide to both high-income and lower-income countries.
Gavi leads on procurement and delivery at scale for COVAX: designing and managing the COVAX Facility and the Gavi COVAX AMC and working with its traditional Alliance partners UNICEF and WHO, along with governments, on country readiness and delivery. As part of this role, Gavi hosts the Office of the COVAX Facility to coordinate the operation and governance of the mechanism as a whole, holds financial and legal relationships with 193 Facility participants, and manages the COVAX Facility deals portfolio: negotiating advance purchase agreements with manufacturers of promising vaccine candidates to secure doses on behalf of all COVAX Facility participants. Gavi also coordinates design, operationalisation and fundraising for the Gavi COVAX AMC, the mechanism that provides access to donor-funded doses of vaccine to 92 lower-income economies. As part of this work, Gavi provides funding and oversight for UNICEF procurement and delivery of vaccines to all AMC participants – operationalising the advance purchase agreements between Gavi and manufacturers – as well as support for partners’ and governments work on readiness and delivery. This includes tailored support to governments, UNICEF, WHO and other partners for cold chain equipment, technical assistance, syringes, vehicles, and other aspects of the vastly complex logistical operation for delivery. Gavi also co-designed, raises funds for and supports the operationalisation of the AMC’s no fault compensation mechanism as well as the COVAX Humanitarian Buffer.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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Marsh is the world’s leading insurance broker and risk advisor. With around 40,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data-driven risk solutions and advisory services. Marsh is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people. With annual revenue over $18 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. For more information, visit mmc.com, follow us on LinkedIn and Twitter or subscribe to BRINK.