DEVELOPMENT OF ENVIRONMENTAL INSURANCE IN THE CONTEXT OF TRANSFORMATIONAL CHANGES

Abstract

The article deals with theoretical and practical issues related to the development of environmental insurance in the context of transformational changes in the economy and sustainable development of the State. This emphasizes the multidimensional nature and wide coverage of potential objects of insurance protection of individuals and legal entities. It is proved that environmental insurance needs to be developed in terms of insurance coverage of environmental protection not at the expense of the State, but not at the expense of insurance mechanisms. This situation indicates significant gaps in the financial provision of environmental safety and shifts the burden of consequences to taxpayers. The author substantiates the need to introduce and develop compulsory environmental insurance. This will create a reliable financial instrument to compensate for environmental damage and encourage business entities to take a responsible attitude to the environment. The author also outlines the areas of use of insurance protection methods, which indicates the potential of environmental insurance as an effective mechanism for damage prevention and compensation. In a situation where negative externalities of economic activity continue to create a significant burden on the environment and the budget, establishing an effective system for internalizing these externalities is a key to environmental safety and sustainable development of the country. The article shows that environmental risk insurance should be viewed not only as a tool for ensuring environmental safety, which performs compensatory and preventive functions. It is also a powerful mechanism that stimulates technological upgrading of production facilities. In this regard, environmental insurance should be seen as a possible breakthrough area that promotes the development, implementation and diffusion of innovations. It creates an economic incentive for companies to invest in safer and more environmentally friendly technologies, thereby reducing environmental risks and ensuring sustainable development. The environmental insurance system plays a significant role in promoting technological modernization and encouraging businesses to apply innovative developments. It encourages the introduction of new technologies characterized by a reduced level of negative environmental impact. All of these measures are aimed at reducing insurance premium rates to an acceptable level for operating companies, especially in the agricultural sector. This creates an economic incentive for greening production.