The draft report on nat cats and insurance practices was put together by the unit for scientific support to financial analysis at Ispra, the commission’s Joint Research Centre (JRC) in Italy.

In its final document the JRC is expected to produce comparable qualitative and quantitative nat cat information for all EU states. It will also draw conclusions for the Commission’s internal market and services directorate (DG Markt) to draw up proposals for the development of EU nat cat insurance and for the improvement of the efficiency of existing markets. These proposals could come as early as this year.

The Commission has also asked EU states for risk assessments to allow it to produce, this year, an overall view of natural and man-made risks in the EU.

It wants to reduce risk and to improve the preparedness for, and response to, nat cats, which it believes could be increasing in frequency and intensity because of climate change. Losses are also increasing as populations grow, wealth increases and people move onto high-risk floodplains.

Meanwhile, Kristalina Georgieva, EU Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, has proposed a revision to EU civil protection legislation to make disaster management more effective, including 'a much greater emphasis on disaster prevention and risk management'.

She wants to increase the EU’s annual civil protection budget from around €25m to €65m.

Ms Georgieva’s proposal is now with the European Council and the European Parliament. The council talks are likely to last into the second half of 2012.

The draft JRC report reflects the lack of comprehensive and standardised data on nat cats, losses and insurance cover.

The researchers sought total loss figures and insured losses, taking into account potential deductibles and insurance limits, to get a clear picture of the relevance to each country of particular risks and of the size and efficiency of the insurance systems. However it concluded: “There are problems in collecting data on insured losses and thus the present work will only rely upon data on total losses.”

Data often does not exist, different sources use different criteria or the years reported may not be clear, say the researchers.

Even total losses are not available for all events. For example, in the Em-dat database, economic losses are only available for 318 of 561 events recorded from 1990 to 2010.

The JRC draft concludes, as expected, that across the EU the risks of floods, storms and earthquakes are heterogeneous, as are insurance markets.

It also says that in the area of flood risk, for example, insurance is efficient in countries such as Belgium, Ireland, France and the UK. But 'Bulgaria, Austria and Finland could face potential problems', it adds.

For storm risk, the draft identifies Bulgaria, Italy, Greece and Romania as countries with potential problems.

The JRC found little earthquake risk information, but efficient insurance markets in Belgium, Spain and the UK with poor markets in Greece and Italy.

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