09 November 2012

Insurance Insight: Environmental risk concerns top list for mid-size European companies

Ace Group's latest study identified environmental risk as the top emerging concern for 38 per cent of companies in the UK, 33 per cent in France, and 35 per cent of mid-sized companies across Europe generally.

The environmental risk landscape has experienced dramatic change in the past decade, driven by evolution in society's attitudes as well as legal and regulatory developments, the firm said. Ace estimates that there are now over 250 pieces of legislation that have environmental implications in the UK alone. The European Liability Directive, in particular, has significantly changed the exposure of European companies, especially for those in Central and Eastern Europe, which faced less stringent requirements previously.

The research suggests that a significant number of today's European companies have seen or experienced the effect of environmental issues first hand. The research also suggests that the momentum around environmental risk awareness is growing. Some 66 per cent of companies believe that environmental risk is an increasingly important issue for every 21st century business, while 54 per cent expect the level of risk their own company faces to increase over the next five years. In addition, around a third of companies do not have specific insurance in place to cover environmental risks, are unsure whether or not they have cover, or think that the risks are covered by another insurance policy.

Encouragingly, however, 43 per cent of companies view insurers as the leading source of information on the environmental risk environment, and 64 per cent said that insurance is important to their environmental risk management strategy.

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