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EC Flood action programme, Stakeholders' group meeting Brussels, 16 September 2005

This article discusses the impact of floods on different insurance classes and explores European institution initiatives, reinsurance, and insurance initiatives. It also covers experience-sharing on flood hazard mapping and zoning, and the promotion of Public/Private Partnerships (PPPs) for the development of natural catastrophe insurance in Europe.

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EC Flood action programme, Stakeholders' group meeting Brussels, 16 September 2005

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  1. AB 5154 (09/05) European insurers and flood risk management Roland NUSSBAUM Chairman Natural Hazards Working Group Property Committee Comité Européen des Assurances (CEA) EC Flood action programme, Stakeholders' group meeting Brussels, 16 September 2005

  2. Insurers and flood risk management • Context • Impact on insurance • Natural catastrophe cover schemes • European institution initiatives (examples) • Reinsurance and insurance initiatives II. Experience-sharing on flood hazard mapping and zoning III. CEA promoting the Public/Private Partnerships (PPPs ) necessary for the development of natural catastrophe insurance in Europe

  3. Context - Impact on insurance • Many insurance classes affected: • Property. • Health/life. • Agricultural insurance (animals, crops). • Construction. • Professional risks (business interruption). • Transport (marine and aviation). • Even motor. • Insurability: important issue • Natural catastrophe losses: • Economic and Insured losses • See graphs on next 2 slides

  4. Natural catastrophes from 1950 to 2003 in the world More than 100 victims or more than 100 million US $ of losses

  5. storms floods floods subsidence floods

  6. ii. Penetration density of natcat extended coverage in European national insurance markets"facultative" inblue, "compulsory" in greenintensity of colours according to penetration density

  7. I. Context - European institution initiatives • European Climate Change Programme (ECCP) March 2000 • Approval of the Kyoto Protocol on climate change Council Decision April 2002 • Communication from the Commission “Winning the battle against global climate change” February 2005 • The European Union Solidarity Fund Council Regulation Nov 2002 - Proposal April 2005 • EU Flood Action programme Communication on flood risk management July 2004 • INSPIRE Proposal for a directive July 2004

  8. I. Context iv. Reinsurance and insurance initiatives • Reinsurers’ initiatives(1) • Promoting initiatives aimed at reducing the emission of greenhouse gases. Participation in worldwide projects (cooperation with IPCC - Intergovernmental Panel on Climate Change and UNEP - United Nations Environment Programme …). • Search for new products, new technical tools in order to estimate potential losses. Publication of communication papers. • Insurers’ initiatives linked to natural events • Involvement in climate change issues: debates on adaptation strategies at national level • Improving existing systems in terms of natural catastrophe cover • Experience-sharing on risk knowledge and prevention techniques: • Hazard mapping and zoning • Promoting PPPs necessary for the development of natural catastrophe insurance in Europe (1) Swiss Re and Munich Re

  9. II. Experience-sharing on flood hazard mapping and zoning Criteria for review of market trends to handle this issue: a) Density of flood insurance b) Types of flood hazards involved c) Market motivation for access to public cartography and zoning d) Relevance and availability of hazard maps originating from the public authorities e) Existence and progress of zoning/rating projects at the initiative of the markets f) Existence of developments at the initiative of individual players g) Forms of PPP in operation

  10. Country profiles: How do insurance markets access flood hazard zoning data ? For what use ?

  11. DE CZ Market proprietary zoning tools Public zoning tools used by the market FR UK

  12. III. CEA communication for the promotion of the Public/Private Partnerships (PPP) necessary for the development of natural catastrophe insurance in Europe CEA document AB 5148 (09/05) on table

  13. CEA communication on PPP EXECUTIVE SUMMARY 3 main PPP  segments  or  components  • Political, with economic and social issues • Principles • Objectives • Policies and means • Financial: market forces, and PPP according to insurability conditions, to structure ex ante financing layers • Organisational and technical, with regulatory and/or normative and governance issues

  14. CEA communication on PPP EXECUTIVE SUMMARY (contd) CEA Action Plan: • To initiate, with help of Commission services, meetings with interested parties • To design various options for solutions for concerned Member States and markets to consider in their own decision-making process • To start thinking about how to address these issues at European cooperation level…

  15. INVITATION TO PARTICIPATE: open discussions to be held soon in Brussels between • Governmental experts,Commission services and Members of European Parliament • National Insurance Market Associations, NGOs and other stakeholders on the promotion of Public/Private Partnerships necessary for the development of natural catastrophe insurance in Europe, especially for veryexposedMember or Accessing countries, with low penetration of this type of insurance.

  16. CEA papers that are available on www.assur.org: • Cover, reinsurance conditions and reserves • Flood prevention • Catastrophe claims management • Experience-sharing on flood risk mapping and zoning: volume I and II (Annexes)

  17. www.cea.assur.org nouguier@cea.assur.org roland.nussbaum@mrn.gpsa.fr

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