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World Bank launches insurance scheme to fund pandemic responses

A healthcare worker dons in protective gear before entering an Ebola treatment center in the west of Freetown, Sierra Leone. (AP Photo/Michael Duff)

Who would have thought that the best way to speed up the international response to major disease outbreaks would be to set up an insurance company? The World Bank, that’s who.

Map of Ebola cases in West Africa from the outbreak 2013-2016. CDC

Nearly everyone agrees that the Ebola outbreak in West Africa that began in 2013 and lasted until 2016, killing more than eleven thousand people, would have been much smaller had the international community responded promptly to the outbreak when it was first recognized.

While some experts have primarily blamed the World Health Organization for its slow response, it’s fair to say that it wasn’t just WHO that moved too slowly to mobilize an appropriate disease containment and treatment response to the outbreak. One reason for the delay: lack of funding and consensus on who should pay.

The World Bank wants to prevent that from happening again with a new insurance scheme.

The global financing agency focused on poverty launched the scheme on Wednesday, raising more than $425 million for the Pandemic Emergency Financing Facility, a pooled and re-chargeable fund that will provide money to developing countries when there is a disease outbreak. Investors can make money as long as there are not outbreaks, but pay out if a pandemic emerges.

In one sense, the fund itself provides a financial incentive to encourage a prompt response – since the earlier the world responds, the less money the investors risk paying out.

“With this new facility, we have taken a momentous step that has the potential to save millions of lives and entire economies from one of the greatest systemic threats we face,” World Bank head Jim Yong Kim said in a statement. “We are moving away from the cycle of panic and neglect that has characterized so much of our approach to pandemics.”

Kim announced the plan to start the financing facility in May 2016, but it took a year before its official formation and bond issue. The idea is based on the fact that pandemics have a significant global economic impact and acting quickly in response can prevent an outbreak from spreading out of control.

An estimated $570 billion is spent each year on moderately severe to severe pandemics globally. If the world experiences a massive epidemic on the scale like the 1918 Spanish flu that infected 500 million people, the response would easily get into the trillions of dollars, or some five percent of global GDP.

The new World Bank-sponsored pandemic fund is focused on responding to outbreaks involving six viruses that are most likely to cause a pandemic. The culprits: Orthomyxoviruses (new influenza pandemic virus A), Coronaviridae (SARS, MERS), Filoviridae (Ebola, Marburg) and other zoonotic diseases (Crimean Congo, Rift Valley, Lassa fever). Some 77 countries that are a part of the World Bank’s developing country-focused International Development Agency are eligible to receive funds from the new facility.

The Ebola outbreak in West Africa was the world’s worst such pandemic, surprising experts who expected it – like most prior Ebola outbreaks – to ‘burn itself out’ and remain concentrated in a small area. Instead, for reasons that are still debate by the experts, the virus spread rapidly (and in ways never seen before), killing more than 11,000 people mostly in Liberia, Sierra Leone and Guinea.

Once the WHO and the rest of the international community recognized this was a much larger, atypical outbreak of Ebola, it sill took roughly 3 months to raise $100 million amid the confusion over how best to respond. The World Bank believes mobilizing money quickly could have helped reduce deaths while also reducing costs. The outbreak eventually cost the world some $10 billion to contain, treat and aid with recovery.

The fund is essentially a global insurance agency. The World Bank developed it with reinsurance companies Swiss Re and Munich Re to develop the bonds and manage payouts. The Bank says some $500 million of coverage will be available over the next 5 years.

“This creates an entirely new market for pandemic risk insurance. Drawing on lessons from the Ebola Outbreak in West Africa, the Facility will help improve health security for everyone,” Kim said.

The money alone will not prevent future pandemics, of course. Reforms are underway at the World Health Organization to improve its ability to respond to crises and the targets set by the Sustainable Development Goals aim to help countries improve health systems. But the new World Bank fund, many say, will play an important role by speeding up access to money – an important component to averting a public health disaster.


About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]