One broker has seen a niche in which it can sell insurance policies and help the environment.

Marsh PB has launched an environmental insurance policy in six Asian countries, including Thailand.

Marsh PB is a unit of United States-based Marsh and McLennan Companies. It expects its environmental insurance will be a big seller here over the next five years.

While visiting Thailand Jim Finnamore, Marsh Singapore senior vice president, said the company would try to sell policies to heavy industry and engineering companies as well as oil-producers, power-generators, waste-water managers and property-developers.

"We see this as a major growth area. The Asian market has huge potential for environmental products," Finnamore said.

Some corporate spending in Thailand has been derailed due to environmental concerns on a number of occasions. A notable inclusion is Gulf Electric's coal-fired power plant in Prachuap Khiri Khan. It was required to relocate and switch to natural gas.

There are growing concerns the Electricity Generating Authority of Thailand plans to increase the volume of power it generates using coal, a practice many countries are adopting as oil prices rise.

Finnamore said five other Asian countries the company expected to sell insurance to were China, the Philippines, Singapore, Taiwan and Hong Kong.

"We've seen a lot of interest in China. The gas industrials are operating there. We've seen a lot of interest in the Philippines in the gas sector. Singapore - it's enforcing quite a lot of environmental legislation. There's also interest in Taiwan while in Hong Kong most interest is from property," said Finnamore.

He added his company believed environmental insurance could grow in Thailand following its strong economic growth, which could push the Thai market among its top six targets.

According to Finnamore, Marsh will act as a consultant and design coverage clients need. It will then shop around for insurers that offer coverage.

He said there were many multinational insurance companies providing coverage. However, in the future Marsh will seek local insurers to expand its business.

Marsh's environmental products are designed to cover both pre-existing and new pollution at sites that give rise to liability including third-party bodily injury and property damage, site clean-ups, emergency expenses, defence costs and changes in legislation. Policy features include sudden and gradual pollution, claims made and reported and multiyear cover for one-off premiums.

Environmental insurance was first introduced after the Love Canal tragedy. Between 1942 and 1953 the Hooker Chemical company dumped 22,000 tonnes of waste into an abandoned canal in New York State.

Love Canal gained attention in 1978 when the New York Health Department declared a medical emergency there. President Jimmy Carter later declared a national emergency.

Hundreds of families were forced to move.

In another example, in October this year Honeywell Inc agreed to spend US$451 million (Bt16.5 billion) to help clean up Onondaga Lake, a sacred American Indian waterway turned into a toxic stew by a century of municipal and industrial pollution.

Finnamore said US gross premiums for environmental insurance were in the billions of dollars.

In Thailand, although awareness of environmental insurance is low, Finnamore said "people" would be the key driving factor pushing companies to take responsibility for the environment.

Besides, multinational companies are demanding their international subsidiaries take out protection, he noted.

Piyarat Setthasiriphaiboon

 The Nation