WRITTEN QUESTION E-0114/03

by Ralf Walter (PSE) to the Commission

(28 January 2003)

Subject: Insurance against natural disasters

Can the Commission indicate what different insurance systems and other types of financial safeguards, provided by the insurance industry and by states, exist in EU Member States, with regard to natural disasters, including:

- earthquakes,

- landslides,

- avalanches,

- floods, and

- storm tides?

Answer given by Mr Bolkestein on behalf of the Commission

(4 March 2003)

Natural disasters are infrequent, erratic and violent phenomena that are exceptionally costly. They occur at random in various parts of a country but the costs involved are very high as the damage is as a rule confined to a specific area (city, region, etc.).

Member States are exposed to the risk of natural disasters in differing degrees, some being more vulnerable than others, on account of location, population spread, etc., to certain types of natural disaster (floods, earthquakes, avalanches, tidal waves, storms, etc.), which also vary considerably in terms of frequency and intensity.

Given these differences between the Member States, systems to protect against natural disasters can be put in place more satisfactorily at regional or national level than at Community level. As laid down in Regulation (EC) No 2012/2002(1), Community aid should be complementary to that of the Member States and, under the subsidiarity principle, should be confined to major disasters.

Different insurance systems are used to protect against natural disasters in the Member States. Most have arrangements for providing compensation for damage caused by natural disasters. These vary depending on the type of disaster involved: floods, avalanches, earthquakes, storms, etc. The solutions existing in each of the Member States also depend on the exposure of the Member State to the risk of natural disasters, which sometimes makes certain categories of risk uninsurable or technically very difficult to insure.

According to the information available to the Commission, in some Member States private insurance policies give cover for certain categories of natural disaster (for example, storms, thunderstorms, earthquakes). This can either be additional or complementary to the principal risk covered by the policy (for example, fire insurance policy for a building) or take the form of separate cover in a specific insurance policy. Such cover is sometimes required under national legislation, which spells out the risks that have to be covered as well as the terms and conditions. But there are some risks that cannot be covered by private insurance operators because the degree of exposure is too great (for example, floods in the Netherlands).

In most Member States, the public authorities also provide cover for natural disasters based on national solidarity. This takes different forms depending on the particular situation in each Member State. It may either replace or supplement insurance schemes: in such cases the public authorities may cover risks through pools or funds providing insurance cover in addition to cover under insurance policies. Or, in other cases, Member States have reinsurance schemes for insurance companies which are required under national legislation to provide cover against the risk of natural disasters.

In addition to these insurance-related systems some Member States have special arrangements for providing compensation for damage caused by natural disasters which are not insured (disaster funds). And lastly, under certain circumstances, some Member States make ad hoc provision to contribute to compensation for damage (aid, credit on favourable terms, etc.).

(1) Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund: OJ L 311, 14.11.2002.