The creation of a new compulsory pandemic insurance scheme, along the lines of the natural disasters scheme, was ruled out by the Ministry of the Economy and Finance, following a meeting with insurance companies on December 7, 2020.
A cost deemed disproportionate to the frequency of pandemics
For months, insurance companies have been working on the creation of pandemic insurance, at the request of the French Ministry of the Economy and Finance. Indeed, Bercy had been rather favorable to the introduction of a new insurance scheme to cover companies in the event of an exceptional event.
A working group was set up in the spring, bringing together insurers, members of parliament, brokers and company representatives. But the thorny question of financing soon posed a problem, and the balance between the benefits of such coverage and the additional cost to companies seemed difficult to achieve.
In the end, Bercy ruled that the cost was disproportionate to the exceptional nature of a pandemic like Covid-19.
Towards a self-insurance system?
"All those who wish to do so will be able to set aside provisions, which will benefit from a particularly advantageous tax regime, enabling them quite simply to put money aside when things are going well," declared Bruno Le Maire, Minister of the Economy and Finance, following the December 7 meeting with insurance companies.
Considering that it would be "a mistake to impose new burdens on companies in this period of economic crisis", the government seems to be moving towards a self-insurance scheme for companies, via a system of tax incentives. However, Bruno Le Maire did not go into detail about this option, and we'll have to wait until next year for any legislative decisions.
The Association pour le management des risques et des assurances de l'entreprise (AMRAE) has warmly welcomed the government's decision. It is in favor of setting up, with government support, captive insurance companies that would enable companies to be their own insurers.