The World Bank launched a $500 million fund on Saturday to combat deadly pandemics in poor countries. Its fast-dispersing fund will, in effect, create the world’s first insurance market to cover outbreak of diseases. Japan has committed the first $50 million towards the initiative, which will combine funding from reinsurance markets with the proceeds of a new World Bank-issued high-yield catastrophe bond. In the event of an outbreak, it will release funds quickly to affected poor countries and international agencies.
The recent Ebola crisis in West Africa was a tragedy that we were simply not prepared for. It was a wake-up call to the world
World Bank president Jim Yong Kim
The idea was developed in conjunction with the World Health Organization and reinsurers Swiss Re and Munich Re, which are acting as insurance providers. The mechanism is limited to infectious diseases most likely to cause major outbreaks, including several types of influenza, respiratory diseases such as SARS and MERS, and other deadly viruses including Ebola and Marburg. “We can’t change the speed of a hurricane or the magnitude of an earthquake, but we can change the trajectory of an outbreak. With enough money sent to the right place at the right time, we can save lives and protect economies,” said World Bank president Jim Yong Kim.