How ELD transformed the environmental insurance market

Transcription

1 Corporate responsibility & sustainability 8-9 OCTOBER 2018 ANTWERP, BELGIUM How ELD transformed the environmental insurance market cyber

2 European Risk Manager Survey

3 Corporate responsibility & sustainability 8-9 OCTOBER 2018 ANTWERP, BELGIUM cyber How ELD transformed the environmental insurance market Aurélie Fallon Saint-Lo AXA XL

4 The ELD at this stage? From observations to actions

5 The EU and the «natural» challenges facing it The Major goals of the ELD Prevent and remedy environmental damage based on the polluter-pays principle Contribute to a better environment by preserving natural resources (biodiversity, water and land) Across the EU, the Directive has led to standards for prevention and restoration of environmental damage application of the polluter-pays principle EU-wide liability for biodiversity damage public participation and access to justice for people affected and NGOs 5

6 Significant variations in how the ELD is implemented Interpretation and application of significant biodiversity damage Denmark, France or Slovenia: Severe almost catastrophic cases No cases at all in Denmark, France, Slovenia Germany or Poland: Any biodiversity damage beyond negative variations (ref Annex I to the ELD) Poland has reported 515 ELD cases for the period , of which approximately one in five relates to biodiversity damage Germany: Almost half of 60 reported ELD cases in Germany for relate to biodiversity damage 6

7 The biggest challenge Knowing and understanding your exposure / your risks facing new "biodiversity risks" Important to have good baseline data: to understand the exposure to assess the damages 7

8 The insurance market ELD coverage has been introduced in all environmental risks coverage ELD concerns the premises, as well as all types of offsite operations, construction, transportation activities and products Environmental impairment liability policies Environmental risks coverage policies 8

9 Corporate responsibility & sustainability 8-9 OCTOBER 2018 ANTWERP, BELGIUM Current State of Market cyber Arthur Lu Global Head EIL Allianz Global Corporate & Specialty SE

10 Ecological Damage

11 ECOLOGICAL DAMAGE Insuring agreements of EIL policies must be amended, where third party claims include ecological damage 11

12 02 Ley 8/2017, art 30

13 02 LEY 8/2017, ART 30 Financial guarantees adaptation must apply for the activities included in the EIL mandatory scheme SEVESO, IPPC Policy must be independent and a specific limit be applied for the remediation and prevention of environmental damages (cannot be used for other concepts) Regulatory bodies Spanish environmental ministry (federal) or local regulators at regional level If more than 50% of the financial guarantee limit is exhausted, the operator must replace the consumed capacity not more than 6 months later (automatic reinstatement clause) Priority I: 30 Oct 2018; Priority II: 30 Oct 2019 Minimum req. EUR 20mn Who makes the first move?! 13

14 03 Non-regulatory factors

15 03 Non-regulatory factors Climate 15

16 03 Non-regulatory factors Cyber 16

17 Corporate responsibility & sustainability 8-9 OCTOBER 2018 ANTWERP, BELGIUM The Risk Manager perspective cyber Annemarie Schouw Manager Risk & Insurance Tata Steel

18 Risk Manager Perspective Different countries, different rules But What do you need Assessment 18

19 Key learnings & closing

20 Key Learnings Knowing and understanding your exposure / your risks facing new "biodiversity risks". Importance of having good baseline data: to understand the exposure and to assess the damages. EU countries may have stronger local requirements like ecological damage or a mandatory financial guarantee. Your local environmental insurance policy will have to take it into account. There are several key factors to consider for the risk transfer decision on environmental insurance: internal organisation, ELD local legislation, existing local legislation prior to ELD, similar legislation in other parts of the world. You need to take into account non-regulatory factors like increasing natural disasters due to climate change or cyber threats that might impact your operations with consequences on natural resources and biodiversity. The choice of the appropriate option for risk transfer depends on the corporate financial situation and the group risk appetite: global policy, bank guarantee, combination between insurance, bank, guarantee, bonds. 20

21 THANK YOU FOR YOUR ATTENTION 21