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Best’s Commentary: AM Best Welcomes European Union Action on Natural Catastrophe Insurance but Cautions That Clarity Is Needed

via Business Wire

AM Best believes a proposed European Union-backed public-private natural catastrophe reinsurance scheme could be supportive for the bloc’s insurance markets.

A new Best’s Commentary, “AM Best Welcomes European Union Action on Natural Catastrophe Insurance but Cautions That Clarity is Needed”, notes that proposals for a new EU-backed public-private natural catastrophe reinsurance scheme come as several member states are making enhancements to their domestic pools.

Angela Yeo, senior director and head of analytics and operations at AM Best (EU) Ratings Services in Amsterdam, and author of the commentary, said: “AM Best welcomes the fact that the EU and several of its member states are taking actions in response to the increase in natural catastrophe activities.

“An EU-wide pool will ultimately improve pricing volatility for (re)insurance covers offered, ensure funds are available for rebuilding infrastructure in a timely manner, improve risk mitigation practices, and above all, help in closing the protection gap between economic losses and insured losses to households and businesses caused by the effects of climate change on natural catastrophes.”

Dr. Yeo added that many details are yet to be addressed, including whether to make certain initiatives mandatory, or how to set the pricing levels and limits and the extent of regulatory controls.

“These decisions will be important for securing stakeholder support as European markets currently have wide-ranging solutions to deal with their domestic exposures to natural catastrophes. AM Best recognises that a European-backed public-private partnership would need to work for all,” said Dr. Yeo.

To access a complimentary copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=353827.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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