Environmental Risk Insurability Issues – the EU Perspective
Environmental Risk Insurability Issues – the EU Perspective

Author(s): Malwina Lemkowska
Subject(s): Energy and Environmental Studies, Environmental and Energy policy, EU-Accession / EU-DEvelopment
Published by: Masarykova univerzita nakladatelství
Keywords: environmental insurance; environmental risk; insurability of risk;
Summary/Abstract: The aim of this paper is to evaluate insurability of environmental risk. Juxtaposition of the attributes of both environmental risk and insurance market against risk insurability factors will be the evaluation criterion. Two groups of insurability criteria have been identified: endogenous and exogenous ones. Exogenous criteria of insurability refer to the attributes of the risk itself. Exogenous ones are connected with the features of the insurance market and its participants, especially the ability of the insurance companies to deal with the specific risk. The level of environmental risk insurability is relatively low. It is because of the problem with fulfilment of both endogenous and exogenous criteria. The occurrence, which results in environmental damage is very often not sudden, random and extraordinary. The probability of accident and probable maximum loss are difficult to estimate. Additionally, environmental risk results often in catastrophic loss. Although insurance companies provide relatively high capacity, they have problem to create sufficiently large insurance portfolio.

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