About climate change... in the middle of this hot summer
After an extremely cold winter, a rainy spring that caused floods in almost all Europe, summer has brought extreme temperatures, even in regions where hot weather was just a word in the dictionary... Devastating fires in the Moscow area are an example in this respect...
The weather is in constant change, 2010 will be the warmest year in history...
Moreover, global warming could cost the world economy over EUR 5,500 billion, World Bank warns and, in the worst case scenario, this means "over 20% of global GDP".
A significant part of losses is covered by insurance and reinsurance industry. Thus, the number of natural disasters has doubled in the period 1960-1999, while insured losses, mostly caused by weather phenomenon, increased almost seven times.
In the context of increasing danger of floods, droughts, hurricanes and fires, due to climate changes, the CEA (Comite Europeen des Assurances) - European federation of national insurers associations requires profile companies to become directly and actively involved in fighting against the phenomenon.
But, coverage of claims caused by natural phenomena of this kind differs from one country to another. For this reason, it is difficult to consider the implementation, at European level, of an unique coverage system. In some countries, insurance coverage is totally controlled by profile companies, in others the State intervenes more or less directly on this market through the establishment and regulation of mandatory insurance systems, in various forms: basic coverage (Spain and Switzerland), state compensation (Denmark) or a combination of both (Belgium, France and Norway).
That said, it should be mentioned that the purpose of insurance is not to fully bear the losses generated by these events, but to mitigate risks. Insurance industry alone cannot reduce the risks of climate change, but can have a decisive contribution in understanding, assessing and preventing them, and in choosing the policy suitable for every type of phenomenon.
The role of insurers in the fight against global warming is, therefore, crucial and, because of their expertise in management and risk transfer, the industry can contribute decisively to understanding and analyzing the current situation, overshadowed by the dangers of climate change.
Starting from the ideas mentioned above, in 2004, Media XPRIMM, supported by the Romanian Government, Ministry of Finance, Ministry of Administration and Interior, ISC, UNSAR, UNSICAR, started, in the first edition of ICAR - The International CAtastrophic Risks Forum, the biggest lobby campaign for the set-up of the Romanian Catastrophic Insurance Program.
Six years later, the time of discussions on mandatory household insurance, for the first time, switched from future to present.
ICAR 2010, organized in partnership by MAI - the Ministry of Administration and Interior, ISC - the Insurance Supervisory Commission, the Prefect Institution of Bucharest and Media XPRIMM, thus marks a historic moment, the end of an over eight years road, since the first project of law regarding mandatory household insurance has been debated.
The seventh and most important edition of the main European event dedicated to catastrophic risks will take place on October 12, 2010, at the Parliament Palace. The forum will focus on the start and future evolution of mandatory household insurance, and also on catastrophic risks management policies and on the role of public authorities in their management and financing.
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Author: Mihaela CIRCU
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