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Overview of presentation
Agenda item s
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Update on recent insurance for ELD developm ents 1 3 th EC ELD - - PowerPoint PPT Presentation
Update on recent insurance for ELD developm ents 1 3 th EC ELD - - PowerPoint PPT Presentation
Update on recent insurance for ELD developm ents 1 3 th EC ELD national experts m eeting European Com m ission, Brussels 1 0 June 2 0 1 3 Carm en Bell Non-life I nsurance Departm ent I nsurance Europe Agenda item s Overview of presentation
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I nsurance Europe
3 W ho? W hat? W hy?
European insurance and reinsurance federation, founded in 1953 Represents around 95% of European insurance market by premium income Committed to creation of favourable regulatory and supervisory framework for insurers at European and international level.
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I nsurance Europe - Mem bers
3 4 national associations
2 6 EU m em ber states 6 non-EU m arkets
Croatia, Switzerland, Iceland, Norway, Turkey, Liechtenstein
2 associate m em bers
Serbia, San Marino
3 partners
Russia, Ukraine, Kosovo 4
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Risk assessm ent tools
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W hat do these tools identify? Exam ples
Geographical location of potential risk of pollution Individual risks in protected areas, waterways, etc (eg DE) Different costs for remediation of damage DE – GDV ZÜRS ES – access to state ministry mechanism (MORA) FR – Assurpol “3-step process” UK – Larger members in London market with online tools Independent consultations?
Tend to focus on modelling environmental liability rather than the actual environmental damage. Do not always provide loss prevention or size of potential loss
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Risk assessm ent tools
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Need for funding ( difficult w ith econom ic dow nturn) Need for access to data ( lack of central database) Need for consum er interest ( lack on dem and from clients/ state) Barriers can exist for further developm ent of these tools
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Aw areness
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Source of problem ?
Factors
- ELD claims not declare
- SMEs unaware of ELD
risks
- SMEs unaware their cover
does not include ELD risk
- Economic downturn
Lack of demand for ELD cover
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Aw areness
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W hat is the insurance sector doing?
I ncreased aw areness
EU level ( I nsurance Europe) National ins assoc sem inars ( CZ) Surveys and publications ( ES, FR, UK) Ongoing consult w ith govt ( GR) Social m edia ( I T)
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Aw areness
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I nsurance association and com pany publications on ELD risks National govt cam paigns EC conferences and sem inars
ELD aw areness can be increased w ith continued cooperation
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Types of liability products
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Stand-alone ( EI L, EL, EL Dam age) Business activities cover Professional I ndem nity Property GTPL endorsem ent
Various types of cover for environm ental liability risks
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Types of liability products
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Categories include: Often excluded from cover
Industrial sites Contractors cover Professionals cover Transport (road, rail, waterways) D&O cover Willful acts and willful failure to comply with regulations Damage caused by normal operations (ie foreseeable accidents) Gradual and accidental pollution (ie seepage of chemicals) GMOs previously excluded, though some start to cover
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Types of liability products
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Non-binding m odel w ording Though not ELD, environm ental risk cover som etim es also includes:
To offer guidance on designing cover for ELD (DE, CH) Special terms and conditions for some sectors
Business planning (eg architects) Transport
Insurers and brokers also design their own wording to suit special customer needs Bodily injury Property damage Business interruption
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I nsurers’ experiences
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Need not just to execute claim s, but also close Statistics skew ed by focus on large accidents Penalties som etim es given instead of ELD Pollution noted by governm ent, but not as ELD
I ncreased data on ELD cases requires cooperation
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I nsurers’ experiences
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Environm ental risks not only about large pollution accidents Future outlook
Small and frequent losses from road accidents (leak of contaminants into soil) Fuel tank spills A more balanced portfolio (small and large risks) likely to result in more accurate risk data Need to factor in the risks of SMEs Increasing experience for operators, insurers, brokers No “official” data, but stricter safety standards are leading to increased awareness about potential ELD claims Sharing of information at national and EU levels leads to more understanding
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Conclusions
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Increase the risk data
Continue cooperation at state ministry and EU level National databases on ELD data Cooperation between insurance associations and governments
Consider the legislative framework
A voluntary financial security system at EU level enables Member States to assess their environmental situations in terms of:
risk awareness/ risk perception cover available (eg advanced markets v. still-growing markets) government experience with carrying out ELD claims insurance needs of their industries
Caution against proposals that can impact insurance development
EU-wide industrial fund
May distort competition for valuable insurance products, as companies must factor in the expense of contributing to the fund Insurance provides expertise that are not matched by state-run mechanisms Administrative hurdles faced by insurers (eg execution of ELD claims, determination of damage) will similarly be faced by a fund
A free and competitive insurance market system can best suit individual risk needs
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