The European insurance and reinsurance federation has decided that compulsory coverage would not be beneficial to consumers.
Insurance Europe, the European federation for insurance and reinsurance coverage, customers would not be able to benefit from a compulsory form of environmental liability insurance system, and for that reason, it does not recommend the introduction of that type of program.
This federation is made up of thirty four different members across Europe’s national associations.
According to a statement from the federation, “An EU-wide compulsory environmental liability insurance system would not benefit customers and so should not be introduced.” The 34 members of Insurance Europe each represent the various national insurance associations throughout the continent. This includes all forms of coverage and reinsurance, including monoliners, mutuals, pan-European insurers, and SMEs.
The decision against the recommendation for environmental liability insurance was based on a study.
Recently, the federation conducted an Environmental Liability Directive (ELD) survey. An analysis of the findings of that research showed that “many different insurance solutions are already available in EU member states to cope with market demand,” said its report. It also went on to say that the results of the survey showed that in member states a voluntary free market appears to be working effectively in this area which is riddled with complex challenges, “with different products and approaches available.”
It stated that one of the most important things to be learned from the results of this survey is that it would not be possible to create a “one size fits all approach” at the level of the entire European Union. Instead, they feel that if they attempted such an approach, it would actually stand in the way of the efforts that are already underway and that appear to be quite encouraging within the member states.
The Insurance Europe head of non-life, life and macro-economics, Nicolas Jeanmart, explained that different types of environmental liability insurance products, policies, and coverage are required within different markets and “insurers in individual member states are responding accordingly to those needs.” As a result, the recommendation is to allow those efforts to continue forward as opposed to attempting to change the rules with a standard that may not be as effective.