The environmental insurance market has shown further signs of growth in 2006.
In the latest Willis Environmental Index for the first quarter of 2007, insurers have reported an increase of up to 100% in the number of policies placed compared to 2005.
The Index said it was evident that there was a corresponding increase in total premium placed with total premium spend within the London and European environmental insurance market estimated to be in the region of £60m, up from approximately £40m in 2005.
According to the Willis Environmental Index, annual premium placed into “Pollution Pool” insurance schemes available in countries such as France, Italy, Spain and The Netherlands comprises approximately €70m, whilst premium spend on environmental coverage available through the German general liability market has been estimated to account for approximately €250m.
The Index said the increase in premium spent has been tempered by the continuing soft market conditions as well as an increase in the number of policies placed for operational risk exposures, as these tend to be written for shorter policy periods (and thus attract lower premium levels) than long term policies covering historic contamination risks.
It said the London and European environmental insurance market is now more competitive than at any other time, providing the opportunity for broader coverage for reduced premium levels compared to recent years.
Individual insurers are able to offer a capacity of up to approximately £25m, with higher limits available through the use of excess layers.
Such an approach is seldom required however, as the vast majority of policies proceed with a limit of £10m or less taken up, as reported in Willis' Autumn 2006 Index.
