Munich Re's position

A comparison of international markets clearly shows that in order for special environmental policies with a broad scope of cover to be successful, various aspects have to be taken into consideration:

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  The environmental liability risk has to be excluded from public liability policies.
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  Environmental damage due to a gradual and unintended release of harmful substances should only be covered in countries with a high standard of environmental technology.
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  The settlement of environmental claims is a complex matter, as there are frequently numerous injured parties, a potentially lengthy period of damage and, not least, often a very time-consuming remediation process. This all requires policies with special conditions.
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  The know-how needed for risk assessment, underwriting and damage remediation can only be provided by experienced scientists, engineers and specialist underwriters. It is simply not possible to write profitable business in the environmental sector without such experts.

However, if these requirements are met, special policies can more or less completely cover the policyholder's environmental risk while at the same time offering insurers a profitable field of business. Munich Re supports its clients in developing appropriate insurance products and by providing the requisite reinsurance capacity.

The new environmental liability directive is due to be translated into national law throughout the EU by 30 April 2007. As a result, the individual markets in the EU will be looking for innovative insurance solutions in this field.

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