The European Commission has released a green paper that questions the adequacy and availability of appropriate disaster insurance in the face of natural and man-made disasters.
With the green paper the European Commission aims to raise awareness and also assess whether or not action at EU level could be appropriate or warranted to improve the market for disaster insurance in the EU.
The paper states that between 1980 and 2011, the economic toll of natural disasters in the whole of Europe approached €445 billion in 2011 values.
Günter Dröse, chairman of the European Captive Insurance and Reinsurance Owners Association, said: “Insurance and risk transfer is the last instrument once all other risk prevention and mitigation tools have been implemented, in this field companies and public sector have to invest more heavily to avoid or protect disastrous impact caused by natural events.”
According to Dröse, one option may be for companies to set up specialised captives owned by state/public sectors “to provide capacity and/or alternative risk transfer structures in combination with the market capacity provided by the traditional insurance market”.
“I personally would suggest captives (and their owners) to check all options which are available to place sufficient sum insured in the traditional as well as in the non-traditional market. Cost considerations will be just one factor within the decision making process.”
The commission invites stakeholders to comment on the issues set out in the green paper and respond to questions raised. The consultation is open until 30 June.
