ELD in CEE: As Seen by Swiss Re

Balint Putnoky, senior client manager Hungary, Swiss Re

What is the traditional insurance and reinsurance coverage conditions for environmental liability and industrial property risks in CEE?

For highly exposed industrial risks property insurance coverages are still oftentimes not according to Western standards in the CEE region. In many cases sums insured are calculated on book value, limited risk surveys are conducted and more comprehensive covers, e.g. BI, are only slowly picking up.

Liability insurance standards are in most cases based on historic loss experience, neglecting increasing exposures from rising claims awareness, revised liability regimes and technological and economic progress. On the reinsurance side we therefore prefer to cover such complex risks on a facultative basis, where we can assure a dialogue and a proper assessment of the risk.

Does Swiss Re expect a change in pricing and conditions in the CEE segment following the MAL disaster?

In consequence of the loss the risk awareness as well on the insured´s and on the legislation side will increase. There is a call for higher liability coverages for specific activities and a well functioning risk management, and eventually even compulsory covers. Swiss Re especially sees a chance that the loss will trigger an increased demand for ELD covers in the CEE markets, which are currently not widely sold as industry demand remained low up till now. Many insurance companies however are prepared to offer the coverage based on best practice and products already introduced in other markets. Following the sludge spill we already see an increased demand for facultative coverages for such risks.