In a new study, Prof Anastasia Kartasheva et al. explore the potential scope for pandemic insurance in Switzerland. The policy recommendation is that a public private partnership (PPP) for pandemic insurance deserves further empirical evaluation and continued interest by governments. Despite a comprehensive package of fiscal and monetary policies, Swiss firms had residual exposure to revenue drops due to business interruptions caused by government-imposed restrictions during the pandemic. The study shows that although risk accumulation makes cross-sectional diversification unlikely for pandemic risk, intertemporal risk sharing with capital accumulation and the transfer of risk to reinsurance and the financial market can be feasible. The study proposes a framework that can be used to assess pandemic insurance PPP’s economic costs and benefits, as well as its interrelation with fiscal and monetary policies.

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