Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • July 2013
07

No 'one-size-fits-all' approach to disaster insurance, says Insurance Europe

Open-access content Tuesday 16th July 2013 — updated 2.42pm, Wednesday 6th May 2020

Insurance Europe has said there is no one-size-fits-all solution to the insurance required for natural and man-made disasters in Europe.

The European insurance and reinsurance federation was responding yesterday to a European Commission green paper, published in April, which sought to assess whether action at European Union level was appropriate or warranted to improve the market for disaster insurance.

The economic toll of disasters in the whole of Europe between 1980 and 2011 totalled €445bn (£385bn), according to the Green Paper on Insurance of Natural and Man-Made Disasters.

Storms surges, river and flash floods were one of the main natural disaster risks in Europe and with climate change, the green paper predicted, insurers would be asked to cover increasingly frequent and intense events

Insurance Europe welcomed the commission's recognition of the important role of reinsurance in disaster risk management. 'With large-scale disasters continually affecting economic stability and growth in Europe, Insurance Europe welcomes the European Commission's efforts to enhance disaster risk prevention and mitigation across the EU,' said Insurance Europe director general Michaela Koller.

In its detailed response to the green paper, Insurance Europe backed initiatives to facilitate and support increased coverage of disaster risks. These included access to more sophisticated risk data; public, private and government cooperation to minimise the growing impact of disasters; and minimising state intervention in markets where a risk was already insurable.

But, Insurance Europe said, natural and man-made disasters should be dealt with separately.

'Natural and man-made disasters require different approaches, as the insurability of each risk is affected by different factors and the ability to quantify the damage posed by each risk varies,' said Koller.

'Therefore Insurance Europe strongly recommends not mixing the EU discussions on man-made environmental disasters with those on natural catastrophes.'

The federation argued that predicting a natural catastrophe depended on scientific information 'obtained from risk models that evaluate and compare meteorological and geographical data, whereas the occurrence of an environmental pollution incident is more dependent on industrial company risk management and/or regional safety cultures (ie human behaviour).'

Property damage following a flood or storm could be calculated quite easily on a short-tail basis (ie during the policy period) while environmental risks were more long-tail, so it could take years to observe and calculate the extent of damage.

Different insurance markets handled each risk category and had developed their own expertise, Insurance Europe said.

'With respect to natural catastrophes, a flexible insurance market is optimal for ensuring the development of cover that more accurately meets localised risk exposure. Emphasis must also be placed on prevention methods in the form of adaptation to climate change (eg property flood defences, structural building codes, land-use planning and risk zoning) as well as preparedness in the form of government, municipal and public cooperation (eg organised emergency planning, efficient and effective crisis response, government cooperation with insurers to more rapidly contain damage).

'With respect to man-made disasters, a voluntary insurance market across Europe is the most suitable framework for accommodating the variety of liability needs posed by the level of safety standards and industrial operations of the various member states. Insurance Europe thus sees no need to harmonise financial security for this market at the EU level.'

Insurance Europe represents undertakings that generate premium income of more than €1,100bn in total and between them employ almost one million people.

 

This article appeared in our July 2013 issue of The Actuary .
Click here to view this issue

You may also be interested in...

ta filler

MPs issue warning on 'inadequate' flood defences

Government spending on flood prevention remains insufficient to meet the growing risk, despite increases announced by Chancellor George Osborne in last week's spending round, MPs warned today.
Thursday 4th July 2013
Open-access content

Average car insurance premiums back below £700

Average quoted comprehensive motor insurance premiums fell by nearly 8% in the second quarter of 2013, according to the Confused.com/Towers Watson Car Insurance Price Index.
Wednesday 17th July 2013
Open-access content

Fines for poor information management 'to rise significantly'

One in five independent financial advisers expect to see a significant increase in the number and size of fines imposed on the financial services sector over the next five years because of poor information management and storage.
Monday 15th July 2013
Open-access content

Regulation reform again tops poll of insurers' concerns

Changes to the regulation of the insurance industry, including the introduction of the new Solvency II rules in Europe, represent the biggest current risk to firms, a survey by accountants PricewaterhouseCoopers has revealed.
Thursday 18th July 2013
Open-access content

NAPF appoints DB and DC policy chairs

The National Association of Pensions Funds has today announced the chairs of its two new policy-making councils.
Thursday 18th July 2013
Open-access content

Auto-enrolment impact 'uncertain', says NAO

The extent to which pension auto-enrolment will reduce the long-term costs of pensioner support to taxpayers is uncertain, a report by the National Audit Office has warned.
Friday 12th July 2013
Open-access content

Latest from Environment

rdth

Make My Money Matter's Tony Burdon on the practical power of sustainable pensions

Years working in international development showed Tony Burdon, head of Make My Money Matter, that sustainable pensions can harness trillions of pounds to build a better world – at a scale governments and charities can’t. He talks to Travis Elsum
Wednesday 1st March 2023
Open-access content
ty

Data detective

Heard about the chatbot ChatGPT? Artificial intelligence is advancing rapidly, says Arjun Brara – and could soon be used to refine ESG ratings and expose greenwashing
Wednesday 1st March 2023
Open-access content
iugu

Interview: chemist and climate expert Sir David King on how actuaries can save the Arctic

Actuaries can save the Arctic, according to esteemed chemist and climate-change expert Sir David King. He tells Alex Martin that risk management is as relevant to preserving the planet as groundbreaking science
Wednesday 1st February 2023
Open-access content

Latest from July 2013

Tighten up whiplash accident claims, say MPs

Ministers should consider reducing the time limit for road accident insurance claims to help contain the effect of whiplash cases on premium prices, MPs have said.
Wednesday 31st July 2013
Open-access content

More employers register for automatic enrolment

Employers’ awareness of automatic enrolment for workplace pensions increased sharply during the spring, The Pensions Regulator has said.
Wednesday 31st July 2013
Open-access content

FTSE350 pension deficits barely dented by £35bn contributions

Top companies have ploughed over £35bn in their defined benefit pension schemes over the last three years but made little dent to their overall deficit levels, according to research published by Barnett Waddingham.
Monday 29th July 2013
Open-access content

Latest from no_opening_image

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
ta

IFoA adjudication panel: Mr Jack Wicks, student

On 30 October 2019 the Adjudication Panel considered an allegation of misconduct against Mr Jack Wicks (the respondent).
Friday 28th February 2020
Open-access content

Latest from 07

Tighten up whiplash accident claims, say MPs

Ministers should consider reducing the time limit for road accident insurance claims to help contain the effect of whiplash cases on premium prices, MPs have said.
Wednesday 31st July 2013
Open-access content

More employers register for automatic enrolment

Employers’ awareness of automatic enrolment for workplace pensions increased sharply during the spring, The Pensions Regulator has said.
Wednesday 31st July 2013
Open-access content

FTSE350 pension deficits barely dented by £35bn contributions

Top companies have ploughed over £35bn in their defined benefit pension schemes over the last three years but made little dent to their overall deficit levels, according to research published by Barnett Waddingham.
Monday 29th July 2013
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Exposure Management Analyst

London, England
£40000 - £50000 per annum
Reference
148639

Pricing - Casualty Actuary

London (Central)
£128K + bonus + benefits
Reference
148638

Reporting Contractor

Negotiable
Reference
148636
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ