The World Bank is launching a $500 million insurance fund to protect the world against deadly pandemics, creating the first insurance market for pandemic risks.

Designed in collaboration with the World Health Organisation, Munich Re and Swiss Re, the facility includes an insurance “window” that combines funding from the reinsurance markets with the proceeds of World Bank-issued pandemic catastrophe bonds. There is also a complementary cash window.

It will be the first time World Bank Cat Bonds have been used to combat infectious diseases.

World Bank President Jim Yong Kim says the Pandemic Emergency Financing Facility addresses past failures in dealing with pandemics.

“The Ebola crisis in Guinea, Liberia and Sierra Leone taught all of us that we must be much more vigilant to outbreaks and respond immediately to save lives and also to protect economic growth,” he said.

“Pandemics pose some of the biggest threats in the world to people’s lives and to economies, and for the first time we will have a system that can move funding and teams of experts to the sites of outbreaks before they spin out of control.”

In the event of an outbreak, the facility will release funds quickly to countries and qualified international responding agencies.

The insurance window provides coverage up to $500 million for an initial period of three years for outbreaks of infectious diseases most likely to cause major epidemics.