Eiopa stresses need for coordinated response to nat cat threat

Petra Hielkema, chairperson of the European Insurance and Occupational Pensions Authority (Eiopa), has told MEPs there needs to be a more coordinated response involving public authorities to effectively address the threat of natural catastrophes. In a statement this week to the Economic and Monetary Affairs Committee of the European Parliament, Hielkema stressed that insurance coverage alone cannot close protection gaps. Most of Europe’s risk and insurance managers who took part in Commercial Risk’s latest Risk Frontiers Europe survey voiced strong support for the creation of public private partnerships (PPPs) to help tackle systemic risks that the commercial insurance market cannot cope with alone. This comes against the backdrop of the failure of commercial insurance to respond to the business interruption crisis caused by Covid-19, sudden withdrawal and tightening of cyber insurance capacity, and now retreat of the reinsurance and insurance market from natural catastrophe risks. Nobody should be surprised by the retreat from nat cat cover. Last week, Munich Re reported that so far this year Europe alone has suffered seven nat cat events exceeding €1bn in value. The message was clear – the leading reinsurer would continue to offer cover in this core line but on a more restricted basis than in the past. Hielkema and her team at Eiopa are clearly well aware of this trend and along with other European supervisory bodies has voiced support for PPPs as a potential solution to rising systemic risks. She took the chance to make this point to MEPs this week during her statement. She stressed that inflation remains a big challenge for the insurance sector, but really focused on closing protection gaps, notably in the area of nat cats, and cross-border supervision. She pointed out that the European insurance sector currently has total assets of around €9.5trn, positioning Europe as a leading insurance market globally. “Yet while it is clear that Europe has a considerable insurance market, it is also clear that there is not enough insurance coverage, and protection gaps persist in too many areas, especially when it comes to addressing natural catastrophes,” said Hielkema. “This is important because we are seeing more frequent and more devasting natural catastrophes affecting our continent than ever before. Unfortunately, I am sure many of you and the constituents you represent will have been affected by fire, flooding, heat or rain in the recent past,” she added. Hielkema explained that EIOPA has taken steps to help measure and close these protection gaps by developing tools such as its natural catastrophe dashboard and the promotion of climate-related adaptation measures in non-life underwriting practices. But more effort is needed in a co-ordinated manner, she said. “Closing these gaps requires a collective effort from us all. Every player in the ecosystem – consumer, insurer, capital markets and public authorities – has a role to play, not only in their own capacity, but also by strengthening the capacity of other players. Without this joint approach, we will not succeed,” she said. “EIOPA is also looking at the cyber insurance protection gap – and I highlight this because October is European Cybersecurity month. Our research tells us that close to 70% of SMEs are not covered for the risk of cyberattacks. This is figure is too large,” she added.

Eiopa stresses need for coordinated response to nat cat threat

Hielkema tells MEPs protection gap needs collective response

Want to read this article?

Read Next

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Starr Insurance opens new operation in Korea

International SOS warns of ‘burnout epidemic’

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Starr Insurance opens new operation in Korea

International SOS warns of ‘burnout epidemic’

Want to read this article?

Read Next

IASB meets in China to discuss climate reporting

‘Pressure rising’ on developing Asian aging risk: ADB

European business confidence in China plummets

Starr Insurance opens new operation in Korea

International SOS warns of ‘burnout epidemic’

Related Articles