QUESTION MARK OVER APPETITE FOR ASIAN ENVIRONMENTAL LIABILITY RISK
Merger and acquisition activity is expected to drive a surge in demand for environmental liability coverage across Asia, where the imminent start of the 2008 Olympics has led to a huge increase in awareness of the potential liability pollution brings. Consolidation is expected to escalate across the world in the next 12 months as economic conditions tighten, with Asian businesses likely to be part of this trend. And the increasing awareness of pollution and environmental liability across the continent will mean that environmental liability cover could be set to become a necessary part of any acquisition transaction. But a question-mark remains over how many Lloyd’s and London firms would be willing to write the coverage in some of the most heavily polluted parts of the continent. A total environmental liability exclusion may be needed for property business in China. "Environmental liability is an emerging risk in Asia," said Peter Phillips, managing director of the Singapore office of Markel International. "The traditional property/ liability policies offer limited coverage for pollution-related damage. There are signs some customers are looking for broader environmental coverage. The environment is a hot topic right now. The level of awareness is rising in Asia. There is potential for the demand for broader environmental coverages to emerge alongside this. It is an interesting emerging risk in Asia.”
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