Spasojević, mr Najdana
Funkcija za aktuarstvo, statistiku
i upravljanje rizicima solventnosti,
Dunav Insurance Company
OVERVIEW OF THE ACTIVITIES OF INSURANCE COMPANIES IN NORTH AMERICA UNDER THE IMPACT OF CATASTROPHE LOSSES CAUSED BY CLIMATE CHANGE
Climate change has increased the severity and frequency of natural hazards, thus leading to catastrophe losses. There is a growing need to reduce adverse eff ects on international economies, property and health of people, which is
why diff erent types of insurance protection are created to respond to climate
change and its consequences.
The state aid in North America, combined with optional insurance provided by private insurance companies, is but one of the responses to these challenges. This model, however, has displayed certain weaknesses such as moral hazard, adverse selection and the lack of solidarity. Fortunately, this can be overcome by combining compulsory and private insurance, state aid and earmarked reserve funds into the creation of an insurance model - a comprehensive coverage of natural hazards - as the only model that meets the current needs for protection.
Key words: climate change, natural hazards, catastrophe losses, insurance, reinsurance, activities of insurers.
INFLUENCE OF CLIMATE CHANGE ON INSURANCE
During past years, we have been witnessing major climate changes causing large-scale damages, very often catastrophic ones. In January 2011, a climate phenomenon la Niña caused a catastrophic flood in Brisbane, Australia. The flood inflicted heavy losses to citizens, companies and insurance companies in Brisbane. The first problem arising from this phenomenon sprung up between reinsurers and insurers. Namely, the January flood in Brisbane and the previous flood in December 2010 were considered to be a single insured event by reinsurers, who thereby protected their economicinterests and paid smaller damages award to insurers. The other problem appeared between insurers and insureds, asinsurersclaimed the floodwas a „riverineflood“,whichwas up to nowexcluded frominsurance.