Sustainability

Water is a basic necessity of life. And yet the quality of freshwater resources is increasingly under threat from industrial and biological pollutants. As part of its commitment to sustainability, Swiss Re strives to develop new insurance and financial solutions which factor in concerns relating to endangered natural resources. Recent developments in European environmental liability legislation have prompted the insurance industry to take a closer look at the insurability of ecological damage.

Mr Busenhart, why is water an issue in the current European debate on ecological damage? 

Pollution of transboundary water courses and the decline in quality and availability of drinking water have devastating effects on nutrition and health. In the European Union (EU), the debate on how best to deal with environmental damage and the resultant health issues was launched almost a decade ago. At present, each individual country within the EU still has its own set of regulations for determining who should be held liable for the cost of environmental impairments. However, an EU-wide solution may well emerge in the medium term. As representatives of the insurance industry, we are very pleased to see this happening.

 

 

 

 

 

Do you think the insurance industry is prepared for this new development?

The industry already offers a fairly comprehensive range of products to cover accidental and gradual environmental pollution that might lead to groundwater damage, for example. But these products are limited to liability for personal injury or property claims resulting from environmental damage, and to clean-up activities for privately owned land. European insurers have yet to develop a standard solution that will cover liability for pure ecological damage caused to the “free goods” of nature that do not “belong” to anyone. If such a solution does become a reality, it could have a significant impact on other insurance markets where the insurability of ecological damage has not even appeared on the radar screen yet.

  

Do you expect demand for environmental liability solutions to grow, and if so, what is Swiss Re doing to prepare itself?

A revised EU directive on the prevention and remedying of environmental damage is due to come into force in the near future, meaning that national legislation will have to be aligned. This new directive will amplify demand for insurance cover and provide the insurance industry with an impetus to develop products and realise potential business opportunities. Swiss Re is seeking to foster public awareness of environmental issues and develop solutions that address the complexities of ecological risks.

 

 

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