The government must introduce incentives to increase property insurance in our country. This is recommended in a report on Bulgaria prepared by the World Bank and quoted by Trud newspaper.
For example, discounts can be introduced for insuring buildings that are energy efficient or have improved sustainability. Currently, the price of property insurance is between 1 and 2 per mille of the value of the building. The report also proposes to consider discounts on low-carbon car insurance.
The report also states that the best option for Bulgaria is to create a catastrophic pool. In rich EU countries, only insurers participated. In our country, however, the government had to get involved.
This will ensure that damage from natural disasters is covered. The World Bank also recommends considering the introduction of compulsory disaster insurance. This is one of the possible sources of funds for the catastrophic pool.
Insurers have long offered such an option. Their idea was to introduce a minimum mandatory property insurance premium of around BGN 20 or 30. The amount will vary depending on the location of the homes and the risks associated with it. For years, however, the government rejected the idea on the grounds that it would introduce a new tax.
The World Bank has collected the opinions of 7 of the nearly 18 companies that deal with non-life insurance. According to 71.4% of the companies, a catastrophic pool should be created. 57.1 percent support the introduction of compulsory insurance.
A problem for insurers, however, is the lack of sufficient information on catastrophic risks. This was stated by 85.7% of the companies.
Source: profit.bg