Academic journal article Business: Theory and Practice

Financing Instrument for Risks Managing. Polish Experience

Academic journal article Business: Theory and Practice

Financing Instrument for Risks Managing. Polish Experience

Article excerpt


The article is the effect of a study carried out within the research program in co-operation with the European Business Club Association e.V., Schloss Oedheim in Germany. The issue was touched in an eariler study (Przybytniowski 2010, 2012) and this is a continuation of research conducted among companies which use insurance as a instrument of financing ecological risks. The structure of the study has been subordinated to the thesis according to which insurance can be an important instrument for financing ecological risks, including risks in mining. The empirical data come from the coal mining sector and refer to the examination of loss ratio in this sector. They were analysed by the author in terms of the economic factor which is the civil liability insurance (compulsory or voluntary) and other types of insurance against damage caused in the environment by its pollution or destruction.

Based on the assumption made, the author concluded that the surface reclamation bonding is a financial instrument which neutralizes the effects of ecological risks, but it may be of compulsory or voluntary character. The development of the insurance market should be stimulated not only by the increase of ecological awareness and the popularity of the principles of corporate social responsibility, as well as the development of compulsory insurance and other economical solutions connected with shaping and protecting the environment.

The methodological concept of the study is based on the functional perspective of insurance market. According to the subject of discussion, the following were applied: elemental analysis--if the object of study requires distribution of the elements without looking for mutual dependence between them (this analysis is descriptive); casual analysis when there is a need for looking for the cause-effect relationships between the elements of the object of the study; logical analysis--consisting of breaking down the object of study taking into account the existing logical relations.

Polish coal mining is characterized by difficult geological and tectonic conditions, causing the existence of many risks associated with the exploitation of deposits, and natural or social factors. Potential natural threats in mining are: subsidence, fire, explosion of coal dust, gas and rock ejection, water and climatic risks.

The objective of this article is to present and evaluate the problems connected with the specificity of environmental risks and their importance in mining. The design of the study was subordinated to the assumption according to which insurance can become an important instrument financing risk in mining, including ecological risk. The sample group examined included entities employing 10 or more people. In this article the author analysed and evaluated the data in terms of their readiness to conclude:

--insurance of examined companies;

--volutary insurance, including liability for environmental damage caused by pollution.

Analysing the trends in the risks of natural disasters and the losses arising from them, it is worth considering whether climate changes have an impact on the frequency and/or intensity of natural hazards. Most of the recent studies referred mainly to the assessment of losses in the economy (Piekle 2007; Vranes, Piekle 2009; Barredo 2009; Nordhaus 2010; Zhou, Wu, Wu 2010). Fewer studies referred to losses in the insurance sector and they were limited to selected hazards in a particular, analysed country (Crompton, McAneney 2008; Changnon 2009).

Taking into account the successively changing market and the hazards that accompany the customers of insurance companies, there are two reasons for treating ecological insurance as an economic and financial instrument (Przybytniowski, Stasch 2012b). With a view to hazards arising and losses accompanying them, an insurance company should be interested in whether these losses are caused by the natural changeability of the climate (Przybytniowski 2010), or are the effect of anthropogenic emissions of greenhouse gases (Bouwer 2011). …

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