Download Wojcic

Challenges and opportunities
for the insurance sector
on example of Polish market
Piotr Wójcik
Liability Department
Director
[email protected]
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
[email protected]
Budapest, 21-22.05.2007
basic insurance concepts
two different types of financial instruments
 insurance (always issued
by insurer)
 liability is TRANSFERRED to
the insurer
 aim is to allow claimant to get
money AND allow company to
continue its activity
 always LIMITED SCOPE of
cover (exclusions, deductible,
limit)
 insurer assesses
PROBABILITY OF DAMAGE
• therefore not available for
certain activities
[email protected]
 guarantee (issued by bank
or insurer)
 aim is to SECURE payment
 company always PAYS BACK to
guarantor, so company can go
bankrupt anyway
 usually very BROAD SCOPE of
cover (few exclusions, no
deductible, limit)
 guarantor assesses FINANCIAL
STRENGTH of company
• therefore available for all
activities if company is
financially strong
Budapest, 21-22.05.2007
basic insurance concepts
 activity of insurers is strongly affected by their
reinsurers
 Polish market closely cooperates with MunichRe,
SwissRe, HannoverRe, SCOR
 typical reinsurance programme on Polish market:
 first USD 1 Mio of single damage is paid by direct insurer
 next USD 39 Mio of single damage is paid by reinsurer
 if all payments accumulated during calendar year exceed
USD 39 Mio – no reinsurance coverage anymore
 thus all insurance products must be agreed with
reinsurers
[email protected]
Budapest, 21-22.05.2007
basic insurance concepts
 voluntary insurance
 insurer can agree with client
scope of coverage
 usually narrower scope of
cover than compulsory one
 insurer can decide if he
accepts particular risk
 therefore insurance market
strongly affects safety
standards in many areas
(pharmacy, chemical
industry, construction works,
food etc.)
 law and high limits – on
Polish market from € 10.000
up to € 50.000.000
 compulsory insurance
 there is no possibility to negotiate
scope of cover
 usually broad scope of cover
 in many countries insurer can not
refuse to accept particular risk
 usually law limits – on Polish
market from € 10.000 up to
€ 1.000.000
 for complicated risks most effective system is mixture of both
[email protected]
Budapest, 21-22.05.2007
available environmental damages insurance
 Polish market offers insurance coverage for
PART OF environmental damage:
 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
 liability arising from civil law regulations, i.e.
• public liability, like Environmental Liability Directive, is NOT
covered
 liability for bodily injury and property damage
• loss of income can be partially covered
 costs of decontamination of soil and waters as an prevention
against civil claim
 damages which occurred on Polish and foreign territory
• excluding USA and Canada
[email protected]
Budapest, 21-22.05.2007
available environmental damages insurance
 basic exclusions from the coverage:
 intentional fault,
 gradual pollution,
 damages caused by listed substances: asbestos, dioxins, PCB
 it is not possible or difficult to get coverage for some
activities, like final wastes disposals
 coverage is always limited by annual aggregate
 i.e. total sum of payments within annual period is limited by sum
insured
 high deductibles are always applicable
 from € 10.000 up to € 250.000
[email protected]
Budapest, 21-22.05.2007
available environmental damages insurance
 claims made trigger is usually applicable !
 i.e. policy is triggered by claim filed during insurance period if
it arises from occurrence which happened after agreed date
[email protected]
Budapest, 21-22.05.2007
claims made trigger
AGREED
DATE
INSURANCE
PERIOD
(1 YEAR)
OCCURRENCE
COVERED CLAIM
[email protected]
Budapest, 21-22.05.2007
claims made trigger
AGREED
DATE
INSURANCE
PERIOD
(1 YEAR)
OCCURRENCE
COVERED CLAIM
[email protected]
Budapest, 21-22.05.2007
claims made trigger
AGREED
DATE
INSURANCE
PERIOD
(1 YEAR)
OCCURRENCE
COVERED CLAIM
[email protected]
Budapest, 21-22.05.2007
claims made trigger
AGREED
DATE
INSURANCE
PERIOD
(1 YEAR)
OCCURRENCE
COVERED CLAIM
[email protected]
Budapest, 21-22.05.2007
as a result...
 partial coverage is available now
 it will be developed in EU countries because of
Environmental Liability Directive insurance
requirements
 it is necessary to find solution for remaining part
of the liability
 state funds?
 pools?
[email protected]
Budapest, 21-22.05.2007
thank you for your attention
[email protected]
Budapest, 21-22.05.2007