Пандемија као катастрофални ризик - изазов за делатност осигурања
Pandemic as a Catastrophic Risk - a Challenge for Insurance Activity

Author(s): Vladimir Čolović
Subject(s): Law, Constitution, Jurisprudence, Health and medicine and law
Published by: Правни факултет Универзитета у Источном Сарајеву
Keywords: Pandemic; Catastrophic risk; Insurance; Premium; Damage; Public funding;
Summary/Abstract: The year 2020 will be remembered for the pandemic caused by the spread of the corona virus, which will cause the problem of economic protection from the consequences in all spheres of life for several years. One of the types of protection against this pandemic is the conclusion of insurance contracts. From the point of view of insurance, a pandemic is a catastrophic event, i.e., a catastrophic risk. Catastrophic risks are different from standard risks. They have their peculiarities, and one of them is the partial unpredictability of both the event itself and the amount of damage that can occur.Therefore, the pandemic is a challenge for insurance, given that insurance companies do not have sufficient creditworthiness to “cover” this risk, that is, to compensate for the damage that may occur due to its realization. The author emphasizes the characteristics of catastrophic risks, as well as the ways of transferring these risks to the insurance companies. It is particularly noted that a homogeneous community of risks with a sufficient number of insurance in a wider area cannot be established when insuring these risks.In addition, the paper pays special attention to the characteristics of catastrophic risks. It is emphasized that these risks are objective - independent of human will. Furthermore, they are technical risks because they are related to the consequences of certain actions. These risks are also dependent, because there is a territorial connection between them. The paper concludes that it is necessary to co-finance premiums and that there are two forms of such co-financing - general public financing and premium subsidies.

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