Brussels, 20/10/2011 (Agence Europe) - The intensity and the frequency of natural disasters is on the increase. This has led to insurance and reinsurance companies being increasingly active in the management of natural disaster risks, and the European Commission, which is convinced of their usefulness and of the need to have new insurance products, intends to cooperate with those companies. This was affirmed by Kristalina Georgieva, European Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, speaking on 18 October in Brussels at the conference on the prevention and insurance of natural disasters organised in the context of the Commission annual international meeting of humanitarian partners (18-19 October). The new insurance products will act as a complement to the new comprehensive and coherent framework for risk prevention (including the strengthening of the EU's rapid reaction ability in the event of disaster as suggested last year) on which the Commission is working in cooperation with the national and local authorities, the commissioner said.
“The increasing number of disasters means that we need to develop stronger policies to manage these risks. Our security depends upon it. And to a large degree our prosperity depends upon it. Insurance will be an important part of the policy mix that we need to develop. Over the next 12 months, the Commission will be working to develop proposals on how to increase the coverage of disaster risk insurance. We rely on the expertise of industry to develop these proposals and the Commission will organise a structured dialogue with Europe's insurance and re-insurance industries to develop a set of options by the end of the year”, Georgieva said. In her view, political decision-makers have three good reasons for cooperating more closely with insurance firms: (1) such firms have expertise in risk management; (2) insurance against risks is needed as this is more economically profitable and reliable for the financing of reconstruction than counting on ad hoc aid from public budgets that are under increasing pressure; and (3) well-conceived insurance policies may work as market instruments to discourage risky behaviour and promote risk awareness. (AN/tranls.jl)