Abstract
Uninsurable risks have significant impact on expenses of private and public sectors of economy. In spite of several commercial insurance products and high quality of insurance services current trend of insurance industry is set to define exceptions of insurance protection. The highest losses caused by realization of uninsurable risks in the Czech Republic are constituted by consequences of floods, deluges and overflows. Recent history of flood occurrence emphasizes insufficiency of prevention, protection and loss solution. Due to these risk factors we have focused our research on issues of uninsurable risks in conditions of the Czech insurance market. The system solution is based on fund approach to ensure commercial insurance protection. Multi-Source System Solution of Uninsurable Risks is purposed in the form of fund with participation of the state authority. Our solution depends on pool creation and primarily should cover enormous claims development. Assumption of fund profitability encourages insurer motivation to become a pool member. Important part of research represents calculation of gross premium. Assessment of input data and calculation of premium are based on real published data and conform to real market development in the Czech Republic. Calculations are also based on our estimations of risk development. This research highlights the importance of uninsurable risks solution. Effective instrument able to protect lives and property is an innovative commercial insurance product. Our commercial solution is a way to strengthen the role of insurance in a field of uninsurable risks. The system solution is designed to conditions of the Czech insurance market and takes into account special domestic factors. We suppose that our solution is possible to be adopted in conditions of any insurance market in case of relevant data and risk factors using.
Highlights
In spite of different factors of each insurance market, this paper describes foreign approach of flood risk solution applied abroad
Commercial solution of uninsurable risks with focus on floods, deluges and overflows especially in the conditions of the Czech insurance market is based on pool approach, which should ensure full insurance protection to all participating members and insurance users
Our research highlights the importance of uninsurable risks solution in order to protect final consumers of commercial insurance and to prevent from high losses and devastating consequences of flood risk realization
Summary
Characteristic features in conditions of the Czech insurance market are claims development and losses caused by floods, deluges and overflows, which appear more often in recent history. Our approach of uninsurable flood risk solution is based on 4 key factors compulsory participation, profitability, pool contribution, state supervision. The amount of 10 million CZK per insurer can cover current claims development without pool and fund losses. System uses a service of own network of claims adjusters in case of risk realization This arrangement contributes to costs reduction and simultaneously to prevent from insurance payments manipulation and to make loss settlement faster. A compulsory financial participation in loss removing is estimated on the level of 10 % of each insured event This measure is adequate in comparison with total estimated costs and supports an assumption of quick claims settlement, which prevent from deferred claims adjustment. A ceding insurer doesnt pay any premiums to the state authority, because these payments are hidden in cash flows into the reserve fund
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
