Challenges and opportunities for the insurance sector on
- Slides: 14
Challenges and opportunities for the insurance sector on example of Polish market Piotr Wójcik Liability Department Director piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
about Polish market Poland is between Germany and Ukraine Germany Poland Ukraine GDP 2005 (billions USD) 2 787 302 83 GDP per capita 2005 (USD) 33 703 7 854 1 744 liability market total premium*) (USD Millions) 8 063 216 94 premium divided by GDP 0, 29% 0, 07% 0, 11% *) general liability excluding motor liability piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
basic insurance concepts two different types of financial instruments ð insurance (always issued by insurer) ü liability is TRANSFERRED to the insurer ü aim is to allow claimant to get money AND allow company to continue its activity ü always LIMITED SCOPE of cover (exclusions, deductible, limit) ü insurer assesses PROBABILITY OF DAMAGE • therefore not available for certain activities piotr. wojcik@gerling. com ð guarantee (issued by bank or insurer) ü aim is to SECURE payment ü company always PAYS BACK to guarantor, so company can go bankrupt anyway ü usually very BROAD SCOPE of cover (few exclusions, no deductible, limit) ü guarantor assesses FINANCIAL STRENGTH of company • therefore available for all activities if company is financially strong Budapest, 21 -22. 05. 2007
basic insurance concepts ð activity of insurers is strongly affected by their reinsurers ð Polish market closely cooperates with Munich. Re, Swiss. Re, Hannover. Re, SCOR ð typical reinsurance programme on Polish market: ü first USD 1 Mio of single damage is paid by direct insurer ü next USD 39 Mio of single damage is paid by reinsurer ü if all payments accumulated during calendar year exceed USD 39 Mio – no reinsurance coverage anymore ð thus all insurance products must be agreed with reinsurers piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
basic insurance concepts ð voluntary insurance ü insurer can agree with client scope of coverage ü usually narrower scope of cover than compulsory one ü insurer can decide if he accepts particular risk ü therefore insurance market strongly affects safety standards in many areas (pharmacy, chemical industry, construction works, food etc. ) ü law and high limits – on Polish market from € 10. 000 up to € 50. 000 ð compulsory insurance ü there is no possibility to negotiate scope of cover ü usually broad scope of cover ü in many countries insurer can not refuse to accept particular risk ü usually law limits – on Polish market from € 10. 000 up to € 1. 000 ð for complicated risks most effective system is mixture of both piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
available environmental damages insurance ð Polish market offers insurance coverage for PART OF environmental damage: ü arising from sudden and accidental event, i. e. • gradual emission (for example small, constant leakage) is NOT covered • damage caused by emissions within permission is NOT covered ü liability arising from civil law regulations, i. e. • public liability, like Environmental Liability Directive, is NOT covered ü liability for bodily injury and property damage • loss of income can be partially covered ü costs of decontamination of soil and waters as an prevention against civil claim ü damages which occurred on Polish and foreign territory • excluding USA and Canada piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
available environmental damages insurance ð basic exclusions from the coverage: ü intentional fault, ü gradual pollution, ü damages caused by listed substances: asbestos, dioxins, PCB ð it is not possible or difficult to get coverage for some activities, like final wastes disposals ð coverage is always limited by annual aggregate ü i. e. total sum of payments within annual period is limited by sum insured ð high deductibles are always applicable ü from € 10. 000 up to € 250. 000 piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
available environmental damages insurance ð claims made trigger is usually applicable ! ü i. e. policy is triggered by claim filed during insurance period if it arises from occurrence which happened after agreed date piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
claims made trigger AGREED DATE INSURANCE PERIOD (1 YEAR) OCCURRENCE COVERED CLAIM piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
claims made trigger AGREED DATE INSURANCE PERIOD (1 YEAR) OCCURRENCE COVERED CLAIM piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
claims made trigger AGREED DATE INSURANCE PERIOD (1 YEAR) OCCURRENCE COVERED CLAIM piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
claims made trigger AGREED DATE INSURANCE PERIOD (1 YEAR) OCCURRENCE COVERED CLAIM piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
as a result. . . ð partial coverage is available now ð it will be developed in EU countries because of Environmental Liability Directive insurance requirements ð it is necessary to find solution for remaining part of the liability ü state funds? ü pools? piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
thank you for your attention piotr. wojcik@gerling. com Budapest, 21 -22. 05. 2007
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