Insurance and expanding systemic risks

This study examines the impact of increasing systemic risks on businesses, insurance companies and governments (i.e. those risks related to natural disasters and environmental pollution, technology and health issues or terrorist attacks). It considers the difficulties encountered in the assessment of potential liability stemming from these risks and reviews alternative compensation mechanisms and new financing techniques that may complement more traditional insurance schemes. It discusses the potential role of governments in the management of emerging systemic risks through methods such as safety regulation, social security and the introduction of compulsory insurance. The study goes on to suggest policy options for decision-makers in government and the business community in order to improve the prevention and management of expanding systemic risks.