A visitor enters the Lloyd's of London Ltd. building in London, U.K. (Photo: Chris Ratcliffe/Bloomberg) A visitor enters the Lloyd’s of London building in London, U.K. (Photo: Chris Ratcliffe/Bloomberg)

(Bloomberg) — Lloyd’s of London, the world’s largest insurance market, plans to begin offering coverage of coronavirus vaccine deliveries.

Parsyl Inc., a U.S. insurance technology company, has teamed up with Lloyd’s to provide policies covering the storage and shipping of potential COVID-19 vaccines and other medicines, according to a Lloyd’s statement on Thursday. Vaccine delivery can be expensive to insure because underwriters are concerned about the risk of medicines being spoiled by excessive heat or cold.

The new business, known as Syndicate 1796, was developed by Parsyl together with insurers Ascot Group and a unit of AXA SA, broker McGill & Partners and Gavi, the Vaccine Alliance, an international public health group that focuses on delivering new vaccines to the world’s poorest countries.

John Neal, CEO of Lloyd’s of London, said in a statement: “There is broad consensus that life can only return to normality after a vaccine is developed, distributed and administered around the world. Lloyd’s has an important role to play in insuring the many risks associated with this global medical response and we are delighted to approve a new innovative syndicate that will provide effective cover for local vaccine distribution supply chains. This unique partnership is a real demonstration of the value and ingenuity the Lloyd’s market can bring to help address a global health emergency, as we share risk to support the brave efforts of those racing to develop and distribute a COVID-19 vaccine.”

As part of the new Global Health Risk Facility at Lloyd’s, the new business will be backed with development capital, allowing it to share risks and offer lower-priced policies, according to the statement. It’s the first public-private syndicate created to help tackle a global health emergency in Lloyd’s history.

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