Insurance underwriting management paper 1
Study on underwriting constraints of environmental pollution liability insurance
Environmental pollution liability insurance is an insurance whose subject matter is the economic compensation liability that enterprises should bear according to law for personal injury or property loss caused by pollution accidents. Based on the characteristics of environmental pollution accidents, this paper analyzes the underwriting status of environmental pollution liability in China, and puts forward some suggestions to optimize the underwriting constraints of environmental pollution liability insurance in China.
Environmental pollution liability insurance; Underwriting status; Underwriting constraint
First, the characteristics of environmental pollution accidents
At present, China's reinsurance system and related laws are not perfect, and the underwriting ability of insurance companies' environmental pollution liability insurance is largely restricted by the characteristics of environmental pollution accidents.
(A) the disastrous loss of environmental pollution
Environmental pollution can generally be divided into three categories: air pollution, water pollution and solid waste pollution. These pollutions are diffuse and will spread rapidly with air, water and other media. The diffusivity of environmental pollution may lead to disastrous losses in some cases. The potential huge losses caused by environmental pollution accidents far exceed the risk tolerance of insurance companies, which leads to insurance companies either not providing this business or underwriting it by stipulating the maximum compensation limit.
(2) Potential environmental pollution hazards
After the pollution accident, the effects of toxic and harmful gases, nuclear leakage and oil pollution on nature and human function are latent. In the short term after the accident, the harm caused by potential pollution will not appear immediately and cannot be accurately evaluated, but for a long time after the accident, pollution will have a lasting impact on the ecological environment and future generations of mankind. The potential harm makes the environmental pollution liability insurance face the problem of claim limitation in the process of compensation afterwards.
(C) the uncertainty of the legal application of transnational environmental pollution accidents
Because there are many stakeholders involved in transnational pollution accidents, it often takes years or even decades to divide responsibilities and conduct legal proceedings. In the case of transnational pollution, the government often solves it through political means out of respect or win over public opinion. Political intervention makes the handling of major transnational environmental pollution accidents face an embarrassing situation with laws to follow, which leads to the arbitrariness of the scope and amount of compensation. There is no limit to the maximum amount of compensation, and insurance companies dare not undertake such business.
Second, China's environmental pollution liability insurance underwriting status analysis
(1) The subject matter insured is mainly sudden and unexpected accidents.
China's current environmental pollution liability insurance covers only sudden pollution accidents. Environmental pollution incidents are both sudden and gradual. From the probability of occurrence, the probability of gradual pollution accidents is often higher than that of sudden accidents, but it is easy to be ignored because it is difficult to show the damage consequences in the short term. The policy excludes such risks from the scope of insurance, which inhibits the enthusiasm of enterprises to insure. The decrease in the number of policyholders will inevitably lead to the failure of environmental pollution liability insurance to meet the requirements of the law of large numbers, and the environmental risks insured cannot be reasonably dispersed, thus bringing great risks to insurance companies that operate this kind of insurance, thus restricting insurance companies from carrying out this business, and finally making environmental pollution liability insurance enter a vicious circle and unsustainable.
(2) Due to different legal basis, there is a contradiction between the terms of the policy and the insurance payment.
After the pollution accident, the civil litigation and compensation to the third party, as well as the litigation costs and subsequent civil compensation caused by the different positions of the insured enterprise and the insurance company, are one of the most concerned issues in the design of liability insurance clauses. However, due to the considerable differences between China's environmental legal system and the Anglo-American legal system on which the policy clauses are based, the interpretation of the policy after the accident is contrary to the existing legal system in China, and there are potential contradictions among the insured, the insurer and the loss party.
(C) Loss assessment technology is not high
Low loss assessment technology affects the reasonable determination of insurance rate and the expansion of insurance scope, which is a difficult problem faced by environmental pollution liability insurance in China. Due to the lack of environmental risk assessment methods, it is very difficult to identify and quantify environmental risks, and the differences between industries and enterprises are also great, so it is difficult for insurance companies to judge the environmental risks of enterprises and make product pricing. The insurance market lacks institutions to identify and judge the risks and damages of environmental pollution. Insurance companies formulate compensation clauses from the perspective of protecting their own interests, which leads to problems such as narrow compensation scope and too many exemption clauses in most insurance products.
(D) The introduction of the new environmental protection law brings opportunities for the development of environmental pollution liability insurance.
The new environmental protection law punishes enterprises according to diaries, incorporates the environmental impact assessment of planning and policies into the law, and determines the possibility of public interest litigation, all of which put forward higher requirements for environmental risk enterprises. The demand of environmental risk enterprises for environmental pollution liability insurance will increase significantly, which will bring opportunities for the development of environmental pollution liability insurance.
Three, China's environmental pollution liability insurance underwriting constraints optimization suggestions
(1) Reasonably divide environmental risk enterprises and determine the insurance coverage.
Environmental protection departments should unite with insurance industry associations, insurance companies and other institutions to reasonably classify risky enterprises and build a scientific and practical enterprise environmental risk rating system. According to the production system, storage and transportation system, the intensity of risk sources and the concentration of environmental risks in the industry, the industries where environmental risk enterprises are located are classified and the environmental risk levels of the industries are determined. Enterprises in the same industry are classified according to regional environment, risk management, emergency rescue, production technology, new and old equipment, etc. , determine the risk level of environmental risk enterprises, and provide technical support for insurance companies to determine the coverage and premium.
(two) pollution accidents will be gradually included in the insurance coverage.
Civil compensation caused by pollution is not only limited to sudden pollution accidents, but also includes gradual pollution accidents. When pollutants accumulate to a certain extent, it will also cause personal or property damage to the third party, and the frequency and loss of the latter is much greater than that of the former, so it is also an objective need to provide insurance for persistent environmental pollution accidents.
(3) The state's preferential policies for environmental pollution liability insurance should gradually shift to compensation for losses.
The state can further manage and encourage the enthusiasm of insurance companies to underwrite environmental pollution liability insurance by establishing a compulsory compensation liability insurance mechanism. That is, the premium of excess liability is paid by the insured enterprises, underwriting companies and state subsidies, and entrusted to commercial insurance companies and reinsurance companies for underwriting, and a part of the loss compensation ratio is increased above the maximum compensation amount of commercial pollution liability insurance. This can not only reduce the insurance company's compensation risk and premium, but also quantify the pollution discharge and control data of domestic polluting enterprises through compulsory insurance, which is helpful to the statistics and control of the marginal cost of social pollution.
(4) Training professional loss adjusters for environmental risk underwriting to promote the development of environmental pollution liability insurance.
The underwriting and claim settlement of environmental pollution liability insurance are special and complicated. It is very difficult for insurance companies to make their own underwriting claims. Cultivating unified and professional environmental risk underwriting claimants can better promote the development of environmental pollution liability insurance, solve the current situation of lack of talents for environmental pollution liability insurance, and improve the underwriting ability of insurance companies.
References:
[1] Zhu Yanbo. Reflections on the socialization of environmental tort relief in China [J]. Journal of Shangqiu Teachers College, 2014,01:112
[2] Hoang Anh Tuan, Zhao Xiong. Study on the Optimal Subsidy Scale of Policy Science and Technology Insurance in China [J]. Insurance Research, 20 12 (9): 6475
[3] Li gang Reflections on the Construction of Environmental Liability Insurance in China [J]. Journal of Southwest Petroleum University (Social Science Edition), 2014,01:6872
[4] Tang Tao. Foreign environmental pollution liability insurance [J]. Qiushi, 2008, 05: 6062
Insurance underwriting management paper II
Analysis of related problems of engineering insurance underwriting methods
Engineering insurance can transfer the risk of the project to the insurance company, thus compensating the losses caused by the risk. The underwriting ability of these insurance companies determines whether insurance can be effectively implemented. According to their own financial resources and underwriting business, they can transfer the risk responsibility they underwrite to reinsurance companies in the domestic or international reinsurance market.
Keywords: international engineering insurance reinsurance
I. Introduction
Under the guidance of the national "going out" strategy, international project contracting has developed rapidly, and China has now become the sixth largest foreign contracted project country in the world. In the fierce competition with developed countries, China contractors gradually realize the important position of insurance in project risk management, but they will encounter many specific problems in actual operation. Although insurance brokers or insurance agents can be used to provide engineering insurance consulting services, engineering contracting enterprises still need to deal with complex engineering insurance types, insurance procedures and policy contents. Therefore, it is necessary for China contractors to be familiar with the underwriting methods of engineering insurance business in the international insurance market, arrange appropriate engineering insurance and improve the risk management level.
Second, the main body of the insurance contract and underwriting methods
In the engineering insurance market, the main body of insurance contract mainly includes insurer, applicant, insured, reinsurance company and insurance intermediary. (See Figure 1 for details)
1. An insurer, also known as an insurer or an insurance company, is the person who collects and pays the insurance premium after an insurance accident. The main services provided include prevention before insurance, rescue during insurance and compensation after insurance.
2. Insured: refers to a project participant who has an insurable interest in the subject matter insured and applies to the insurer to conclude a project insurance contract with the obligation to pay insurance premium, usually the project owner or general contractor.
3. Insured: refers to the project participants who suffered damage and have the right to claim compensation at the time of the insured accident, usually including owners, contractors and subcontractors, and sometimes including lenders.
4. Reinsurance company: Providing reinsurance service is to insure the original insurer (also known as reinsurance company) with risk compensation responsibility, which can improve the underwriting ability of the original insurance company and spread risks.
5. Insurance intermediary: An insurance intermediary is a natural person or legal person institution entrusted by an insurance company or the insured to provide professional services such as exhibition industry, risk management and claim settlement, and collect commissions, handling fees or consulting fees. Among them, insurance broker: refers to the person who concludes an insurance contract for the insured based on the interests of the insured, and provides intermediary services and collects commissions according to law; Insurance agent: a unit or individual entrusted by the insurer to collect agency fees from the insurer and handle insurance business on its behalf within the scope authorized by the insurer; Insurance adjuster: refers to a company established in accordance with the law and entrusted by the insurer, the applicant or the insured to inspect, identify, estimate losses and adjust the subject matter insured, and collect remuneration from the principal. The existence of insurance intermediaries is conducive to promoting the smooth progress of insurance trading activities, reducing market transaction costs and maintaining fair competition in the market.
According to the classification of business underwriting methods, insurance can be divided into: original insurance, reinsurance and * * * simultaneous insurance. The following combined with specific cases to analyze the related issues of engineering insurance underwriting methods.
III. Problems and Analysis
Project background: An African country's east-west expressway, with a total length of 1 200 kilometers, was built by China engineering contractor, spanning 8 provinces in the country. Militants from extremist organizations in the country frequently attack the army, police, government departments and civilians. In recent years, the government has strengthened its anti-terrorism efforts politically and militarily and improved the domestic security situation, but terrorist attacks still occur from time to time in some parts of China. The project under construction may be threatened by it. Moreover, some natural disasters such as earthquakes, typhoons and storms also occur from time to time, so the project is very risky. Therefore, China contractors attach great importance to the risks of this project and hope to transfer them to insurance companies through insurance. As the contract amount of this project is very high, China contractors are worried about whether the local insurance company can compensate their losses when risks come. The main insurance problems encountered and their analysis are as follows:
Question 1: How is reinsurance realized in international insurance practice? Whether the local insurance company reinsurance its business after taking out local engineering insurance. Can the applicant ask the insurer to apply for reinsurance in the international market?
Reinsurance is a derivative form of insurance, which is divided into statutory reinsurance and commercial reinsurance.
First of all, statutory reinsurance, also known as compulsory reinsurance, refers to the reinsurance that the original insurer must reinsurance part of its underwriting business to its own reinsurance company or designated reinsurance company according to national laws or decrees. In terms of protecting the domestic reinsurance market, some countries, especially developing countries, generally adopt measures of establishing national reinsurance companies and compulsory reinsurance. The proportion of compulsory reinsurance varies from country to country, such as 30% in Egypt, 25% in Kenya and 65,438+00% in India, Ghana and Nigeria. The statutory reinsurance business in China began from 65438 to 0996 after the promulgation and implementation of the first insurance law in China. Before joining WTO, the reinsurance market has always been dominated by statutory compulsory reinsurance. As the only professional reinsurance company in China, China Reinsurance (Group) Company can earn 20% of statutory reinsurance every year. However, according to China's WTO accession commitment, the proportion of statutory reinsurance has been decreasing by 5% year by year since 2003, and it was completely cancelled on June 65438+1 October1day, 2006. At this point, domestic reinsurance business has been fully commercialized.
Secondly, commercial reinsurance, also known as voluntary reinsurance, refers to the reinsurance relationship between the original insurer and the reinsurance acceptor in accordance with the principle of voluntariness, stipulating the rights and obligations of both parties, determining the conditions and interests of reinsurance, and signing reinsurance contracts. The business competition in the insurance market is becoming increasingly fierce, and the awareness of "sparing points" of insurance companies is getting stronger and stronger. Businesses with high rates and big profits are reluctant to separate. Reinsurance companies are also reluctant to set foot in low-rate and high-risk businesses. There have been many cases in China where the original insurance rate is too low and the insurance company can't find a reinsurance company to transfer the risk.
The applicant can ask the insurer to apply for reinsurance in the international market, but the method may change. Because insurance companies in African countries generally choose reinsurance companies from developed countries such as Britain and Switzerland as their support, there are also joint insurance consortia, such as joint insurance. The applicant can investigate the reinsurance company, the country and the company's ability of the insurance company he is negotiating, and whether the insurance company will easily change the reinsurance company, but generally he will choose more than one reinsurance company as the backing. You can refer to 10 reinsurance companies with the strongest advantages in the global reinsurance market in 2005 (see table 1).
Question 2: If you apply for reinsurance, how should the insured claim once you get out of danger? Is it through the reinsurance company to claim compensation from the insured according to the proportion it underwrites, or after the local insurance company pays all the compensation to the insured, he will claim compensation from the reinsurance company?
In international insurance practice, the insured and the insured are usually unable to contact these reinsurance companies, unless some clauses of the standard contract need to be revised, and these clauses involve reinsurance companies. Usually, the insurance company will be contacted, and the insurance amount of the insurance company will be borne by the reinsurance company, especially the engineering insurance, which must be borne by the reinsurance company.
Although the existence of reinsurance contracts is based on the existence of the original insurance contracts, they exist independently in law. Therefore, the rights and obligations of reinsurance and original insurance are independent legal relations and cannot be confused. Therefore, the insured cannot claim directly from the reinsurer because there is no contractual relationship between them. If there is a claim, the insurer will find a reinsurer to share it after compensating the insured.
With the change of the times, the internationalization of enterprises has become a trend, and the demand for huge insurance is increasing day by day. Reinsurance solves the problem that no insurer dares to underwrite a huge policy because of the potential catastrophe risk of the original insurance. The existence of reinsurance makes the original insurer's underwriting risk responsibility dispersed, makes the insured get more reliable protection, and reduces the worry about the default of the original insurance contract.
Question 3: Are local insurance companies allowed to insure with local foreign insurance companies? Can I apply for insurance with an insurance consortium composed of several local insurance companies?
The qualifications and restrictions of local laws and regulations on insurance companies determine whether local foreign-funded insurance companies accept such insurance business. According to their own insurance needs and the strength of insurance companies, the insured can consider applying for insurance from private insurance companies or insurance consortia composed of several insurance companies. The latter is * * * the same insurance, which means that two or more insurers conclude a contract on the same subject matter insured, and the sum of the insured amount does not exceed the actual insurable value of the subject matter insured.
* * * There are two forms of insurance. One is external co-insurance, that is, when an insurer accepts a business, due to its limited ability, it invites other insurance companies to underwrite it, and each * * * signs a bill with the insurer to stipulate its liability amount respectively, and will compensate the insured according to its liability amount in the future. The second is internal insurance, that is, the insured insurer is responsible for signing the bill for the leading company, and directly bears the insurance responsibility for the insured, and then the * * * insurers sign the * * insurance contract, and when the insured suffers losses in the future, they will bear all the compensation responsibilities, and then share their shares back to the * * * insurers.
In addition, as far as this case is concerned, it is recommended to insure against terrorist activities, because terrorist activities are excluded from all risks of the project. Terrorism insurance is a new type of insurance following the 9 1 1 incident in the United States. As an independent insurance, terrorism insurance includes compensation for personal and property.
Four. conclusion
At present, although contractors in China have gradually realized the important position of insurance in project risk management, foreign contractors in China still encounter many problems in insurance and claims because they have entered the overseas engineering market for a short time. In this paper, the practical problems of several business underwriting methods encountered by contractors in China are analyzed, which is helpful to improve the engineering insurance management level of contractors in China.
(Author: School of Management, Tianjin University)
References:
Wang He. Engineering insurance ―― Theory and practice of engineering risk assessment. Beijing: China Finance Press, 2005.
Lei Shengqiang. International Engineering Risk Management and Insurance (2nd Edition). Beijing: China Building Industry Press, 2002.
Liu J, Li B, Lin B and Nguyen V: "Key Issues and Challenges of Risk Management and Insurance in China Construction Industry: An Empirical Study". Journal of Industrial Management and Data System, 2007.
Zhang Jiong and Xu: Insurance principles in international engineering insurance claims. International Economic Cooperation,No. 12, 2006.
Liu Junying, Li Haili and Liu Xin: How to Choose Insurance Brokers in the International Engineering Market? International Economic Cooperation,No. 10, 2006.
Liu Junying, Liu Xin, Cao Wei: Study on the Insurance of Potential Defects in Engineering. International Economic Cooperation, No.9, 2006.
Liu J, Flanagan R and Jewel C: "The transfer of construction risk in China-the perspective of insurance industry", Proceedings of the 3rd International Conference on Industrial Engineering and Engineering Management 13; 1st international conference on industrial engineering and management in Asia, Qingdao, 2006.
Problems and countermeasures of overseas engineering insurance claims. International Economic Cooperation, No.8, 2006.
Liu Junying, Liu Xin and Zhang Zhenyu: International Project Contracting Insurance: Challenges Faced by China Construction Enterprises. International Economic Cooperation, No.3, 2006.
Zhao: On the operating environment of the international reinsurance market. Economist, issue 12 in 2003.
Yao Renyuan: International comparison of reinsurance supervision and its enlightenment. Journal of Insurance Vocational College, No.3, 2003.
People who read insurance underwriting management papers also read:
1. insurance customer service and management paper
2. Examples of insurance management papers
3. Insurance company management papers
4. Insurance management and management papers
5. Insurance Customer Service and Management Paper