Insurance Denial not Only for Mining, but also for Residential and Private Parties?

Insurance Denial not Only for Mining, but also for Residential and Private Parties?

Jan 24th, 2013

At Riskope we have been writing and discussing insurance denial issues hitting miners around the world since 2009. Now there is evidence that the problem of Insurance Denial not Only for Mining and is extending to flood insurance (and most certainly to other natural hazard-linked events in the future).

Flooded Gas Station

From a societal risk management point of view the problem is quite intriguing

Seen from a societal risk management point of view the problem is quite intriguing:

1) Governments (at all level, from Central to Municipalities) have allowed residential development of areas that were already, or may become (because of climate change) hazardous (at higher frequency than “calm” areas). Reasons for those decisions vary from demographic pressure (need to find a place for people to settle) to “business like” (more people means more income taxes, more employment, etc.)
2) People have gladly gone into “hazardous” area unknowingly, or because they were affordable. Finally,
3) Insurances were happy to insure, as it meant more business. In some cases they established “agreements” with the government, as they were almost replacing a “public service”.

Whatever the reasons and the history, now insurers are finding themselves overexposed. In fact, governments cannot offer that “public service” (people in “calm” areas would not agree to “pay for the others”) and people in the hazardous area demand safety, rescue and support.

Three actors, three sets of “historic reasons”, three sets of diverging interests.

Any ideas and comments?

Tagged with: , , , ,

Category: Consequences, Hazard, Mitigations, Risk analysis, Risk management

Leave a Reply

Your email address will not be published.

Riskope Blog latests posts

  • Tailings dams risk mitigation through risk informed decision making
  • 22-06-2022
  • Tailings dams risk mitigation through risk informed decision making (Tailings Dam Risk Mitigation Through Risk Informed Decision Making,) is the…
  • Read More
  • An insight of applications of risk management systems to project valuation
  • 15-06-2022
  • An insight of applications of risk management systems to project valuation is the title of an invited lecture at HAWK.…
  • Read More
  • Zero to 300 in thirty
  • 8-06-2022
  • Zero to 300 in thirty is not the performance of a new sensational sport car. And we are talking about…
  • Read More
  • Get in Touch
  • Learn more about our services by contacting us today
  • t +1 604-341-4485
  • +39 347-700-7420

Hosted and powered by WR London.