An international insurance company has decided to stop quoting any new business from the waste and recycling sector partly because of an ‘unprecedented’ number of waste fires, it has been confirmed.
Catlin Insurance Company took on underwriting from the waste sector five years ago but has lost money as a result, according to Colin Panzetta, senior class underwriter at Catlin.
Panzetta told MRW that Catlin would be honouring new business quotes for another nine days.
As quotes in the waste and recycling are usually valid for ten days, any live quotes that are valid can still be taken up within those ten days.
Panzetta added: “But we are not quoting any new business since yesterday (3 April).”
He confirmed Catlin would also be honouring renewal policies for the next 30 days.
He said the reason for pulling out of the industry was because the company had lost money since they took on the waste industry as “the claims had outweighed the premiums”.
He said there are not many insurers left for the waste sector, adding: “There are also a few unrated insurers that have a dabble, but there aren’t many.”
In terms of domestic markets over the last few years he said: “In general the insurance industry has not made much money out of recycling.
“There has certainly been an unprecedented amount of waste fires, which tend to be big. Once they get going it’s very difficult to put some of these things out.”
Damian Hayes, retail division managing director of specialist recycling broker Waste Insure, said: “The increased use of emerging technology and expensive machinery to achieve landfill diversion targets has resulted in some significant insurance claims.
“The result has seen underwriter’s payments for claims far outweigh their premium income with now all but one scheme providing capacity to companies within the waste and recycling sector.
“Our advice to companies seeking cover is to start the process early and be prepared to invest in risk mitigation techniques such as fire alarms, fire suppression systems and CCTV, in addition to carrying a higher excess.”
Last month MRW reported that resource minister Dan Rogerson wanted to introduce a bond system for waste companies so that money is available for waste fire and pollution incidences. This was prompted by a six-month fire at a Thrunton carpet recycling facility where it was unclear who would bear the costs of the clean-up.
Industry members also debated whether to introduce a mandatory insurance scheme to lift the costs of disasters away from local authorities.
At the time, Paul Levett, director of Waste Transition and board member of several other waste companies, told MRW: “I think insurance is probably the better way to go, but none of these things really work unless you have strong enforcement of regulations.”
Last year MRW reported that that waste sector insurance companies were driving up the cost of cover because of the number of recycling fires, and that the sector was in danger of becoming uninsurable.
- Meanwhile fires continue to blight the waste and recycling industry, with the EA criticised recently over its handling of a Lawrence Recycling fire in Kidderminster.