Legislative and regulatory changes have made environmental coverage a hot topic across the Asia Pacific market as more businesses evaluate their risks.
Stephen Ward, head of Environmental, Asia Pacific at AIG, told Insurance Business
that the Asia Pacific market continues to develop and remains front-of-mind for many businesses – and as environmental legislation continues to develop across the region it’s forcing environmental coverage to the top of the agenda in many countries.
“While the environmental insurance market remains small, it provides a valuable service that is becoming more relevant to industries as legal frameworks in different countries evolve,” Ward said.
He stressed that whilst many businesses may never have had an environmental incident, the “constantly shifting” legislation around the world means that operations may not have changed but exposures have.
Developments across the region are being closely monitored as legislation and regulations continue to change, pushing environmental issues and insurance to the front of many executive minds, Ward said.
For example, South Korea became a standard bearer in the environmental insurance space when it made insurance coverage mandatory for high risk classes of business. This has created an opportunity for brokers and insurers across the region.
“Any company with subsidiaries or operations in Korea should be aware of the changes to the environmental legislation and whether their local operations have a suitable existing environmental policy,” Ward said.
“Brokers have an opportunity to show leadership and explain the policy, what the product is that the insured is buying, and why the risk is still relevant in other countries, including those where insurance is not yet mandatory.”
In terms of businesses to target, Ward said that manufacturing businesses or those that use a large amount of water “have a greater exposure than most,” but brokers and insurers need to make the coverage relevant to other businesses – whether that be discussing a Tianjin-style explosion with warehouse operators or water discharge with food and beverage manufacturers.
“We believe that most industries have some level of exposure, so it’s more to do with how you make the product relevant to each industry than the industry themselves.”
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