Understanding Environmental Risks and Claim Trends
In the 9th session this autumn of AIG Academy Connected, environmental insurance was the topic of discussion, focusing on the complexity of environmental exposure and environmental claims. The webinar was hosted by Arsalan Labaf, Head of Liabilities, Nordic & Russian region, while Peter Jarvis, Head of Environmental at AIG, and Environmental Underwriters at AIG Nordic, Anna-Klara Papp and Gunnar Axelsson, presented the topic and insights from their points of expertise.
Peter Jarvis initiates his presentation by asking “Are you confident your clients don’t have environmental exposure?”. Environmental issues are rising on the public agenda, and he explains that the World Economic Forum listed man-made environmental disasters in the top 10 of risks affecting both company’s operational ability as well as reputation. It is now ranked 8 places higher than in 2016 in terms of likelihood, ahead of both terrorist attacks and asset bubbles. Bearing that in mind it comes as no surprise that the environmental insurance market is a steadily growing market.
Further, he highlighted some interesting trends observed in AIG’s most recent claims report. The industry segment called Transport, Comms, Electric, Gas & Sanitary is the biggest in terms of notified events, growing rapidly from the year before.
Eventually, Peter Jarvis initiates the countdown of eight reasons to consider an environmental insurance policy. He stressed that environmental risks are traditionally excluded from conventional types of policies and that environmental risks can have a catastrophic impact. The average loss as a result of environmental damage is over 2 million dollars.
Gunnar Axelsson continues the presentation with the reason; complex claim settlement process. The settlement processes in environmental claims are generally more complex than for property or casualties’ claims, which often leads to many challenges for the company, especially since environmental incidents are complex in nature and can take years to resolve. Further, he emphasizes that companies of all sizes and types are exposed to multiple sources of unexpected environmental risks, so it is important to have a practical preparedness in place.
Anna Klara Papp concluded the presentation by describing the organization of AIG insurance group when it comes to environmental insurance and the products they offer. She presented EniroPro and Pollution Legal Liability, designed for fixed or operational risks, and Contractors’ Pollution Liability, which is designed for contractors. Finally, Papp displays some important questions every client should ask themselves to determine if they have any environmental liabilities or not. This checklist should be used not only by multinational corporations but also by small operations.
Learn more about understanding Environmental Risks by watching the full webcast through the link below.