A few days ago, the Albanian Energy Corporation insured its assets with a coverage value of 550 million euros . Little has been said about the insurance of national assets. Albanian legislation, in this regard, needs to be revised. Until 1999, the insurance of public assets was mandatory by law and every state institution insured its assets. Later, the law was repealed and state assets were left exposed to various risks.
Over the years, colossal damage has been recorded in forests, large state works, irrigation works, buildings, etc. Fires and floods have caused considerable damage over the years. Even the road infrastructure, uninsured, has been constantly exposed to various risks. The public has become familiar with many forced repair interventions that have been undertaken by the state budget.
The Albanian Energy Corporation, aware that Albania is a country exposed to major risks, from earthquakes, fires, floods and landslides, knowing its responsibility, has been insuring these physical assets for years. What does this mean? A damaged public asset, if insured, is covered by the insurance contract. Otherwise, the burden falls on the budget, which means on the taxpayer.
The state budget should not use funds to revitalize the damaged economy, after every event or disaster. A part of this economy should be insured. State institutions should insure their assets. World practice brings concrete examples: uninsured state properties do not exist. Albania should reopen the discussion of insuring public assets.
What are KESH's physical assets?
Hydropower plants (HEPs), turbines, dams and reservoirs, electrical equipment, buildings and energy production infrastructure are the physical assets that the Albanian Energy Corporation insured. They are public property, property of the Albanian public, built over generations and which today constitute a strategic sector for the country: energy. The total value of insurance coverage for these assets amounts to 550 million euros.
Every year, KESH announces a financial insurance tender, with the aim of delegating the risk of fire and natural disasters to insurance companies.
This means that the value of the damage will not burden the state budget, but according to the provisions in the contract, it will be borne by the insurance company. The technical and legal criteria to guarantee the insurance of these works are strong and often the legal and technical filters become disqualifying.
In the reinsurance of KESH assets, the world's largest company
The largest companies in the world of insurance and reinsurance are involved in the reinsurance of KESH's assets. This justifies the reinsurance price, which is also reflected in the price of insurance. The largest reinsurers in the world offer block coverage of KESH's physical assets and the leading reinsurer of this group is Hannover Re, with the highest standards of financial guarantees and rated AA with a stable outlook by S&P.
Insuring such works, due to the high values and the special knowledge and capacities it requires, is not for everyone. SIGAL Insurance Group has been the winner of projects of this nature over the years: major, delicate and strategic projects. SIGAL has previously also been the insurer of the TAP project, with a coverage value of up to 1.5 billion euros. Experience, technical and human capacities and especially reinsurance with global insurance giants, give SIGAL the opportunity to undertake works of this importance.
When it comes to large public and strategic works, SIGAL stands out not only in underwriting, but also in advising on mitigation, minimization of risks, and risk management.
Insurance, as an important asset for the economy, in this specific case becomes a shield for public investments, provides a protective financial layer, avoids the use of public funds for unforeseen losses that in the case of major acts are many millions, and guarantees the continuity of public services.
The media distortion, which reports dam insurance as a major project to avoid affecting the state budget in case of damage as "office insurance", is at best unfounded.
550 million euros as coverage value in case of damage from fire or disasters, as insurance for facilities of such importance is a service of great value to the Albanian public.
