History of NTÍ
Natural Catastrophe Insurance of Iceland was established on September 1, 1975 under Act No. 52/1975.
There had been a long discussion about the importance of establishing some kind of fund or insurance company to cover costs that could be caused by major natural disasters in Iceland. The eruption on Heimaey on January 23, 1973 and the great avalanche that occurred in Neskaupsstaður on December 20, 1974, led to the implementation of this idea. Immediately on December 30th, 1974, the Minister of Social Security appointed a committee appointed by Ásgeir Ólafsson, then director of the Icelandic Fire Compensation Association, Benedikt Sigurjónsson, Supreme Court judge, and Bjarni Þórðarson, actuarial mathematician, to "make proposals for compulsory insurance to compensate for damage to property and movables caused by natural disasters". Ásgeir Ólafsson was the chairman of the committee. The committee drafted a bill on the Natural Catastrophe Insurance of Iceland, which entered into force on 27 May 1975. Icelandic Catastrophe Insurance took over the assets and liabilities of the Catastrophe Fund, which was established when the eruption in the Westman Islands occurred and also compensated for damage caused by the avalanche in Neskaupsstaður. The Disaster Fund finally ceased operations in 1978. The purpose of establishing special natural disaster insurance was, in particular, according to the report of the committee that drafted the first law, "to be prepared in advance with resources and rules on how to compensate in the event of damage to property caused by natural disasters, and at the same time ensuring fairness in this matter".
The first CEO of NTI was Ásgeir Ólafsson, who filled the position as well as the position of Chairman of the board until 1985, he remained CEO until 986. Geir Zoega took over as CEO until 2000, Ásgeir Ásgeirsson held the position until 2010 and since then, Hulda Ragnheiður Árnadóttir has been CEO of NTI.
Chairmen of the Board:
Ásgeir Ólafsson 1975-1985;
Einar B. Ingvarsson 1985-1991;
Guðmundur Þ. B. Ólafsson 1991-1995;
Jón Ingi Einarsson 1995-2007;
Torfi Áskelsson 2007-2011;
Guðrún Erlingsdóttir 2011-2015;
Sigurður Kári Kristjánsson from 2015.
NTI's main role is to insure property and movables in Iceland against natural disasters. All real estates are insured but movables are only insured if it is insured against fire with the general insurance companies. NTI's activities have remained largely unchanged from the beginning. The general insurance companies collect premiums on behalf of NTI in parallel with the collection of premiums for fire insurance. Only direct damage to the insured caused by volcanic eruptions, earthquakes, landslides, avalanches and floods is covered. There is no insurance against derived damages or damages due to disruption of operations following natural disasters. The premium is 0.25 ‰ of the insurance amount, which is equal to the fire insurance amount on buildings and movables. Since 1982, provisions have been in force that oblige the owners of various structures that are not ususally insured against fire, such as various energy and utility structures, bridges and harbors. It is not obligatory to insure these assets with NTI, but the owners are obliged to ensure that such insurance is present with an insurance company. It is common for the largest energy companies to insure structures related to energy production, directly with foreign insurance companies. The premium for such structures is 0.2 ‰ of the insurance amount.
NTI reinsures risks due to major insurance events at an international level, but at any given time between 20 and 30 foreign reinsurance companies are parties to contract with NTI due to natural disasters.
NTI's operations have been housed at Hlíðasmári 14 in Kópavogur since 2014. On average, four to five permanent employees work at NTI, for instance, in specialized projects related to risk assessment due to natural disasters and the development and maintenance of information systems that must always be equipped to serve their role in the event of a loss event.
NTI's main loss events
The following are the biggest loss events that have occurred since NTI was founded in 1975.
1976, Earthquake at Kópasker
1983, Slushflood at Patreksfjörður
1984, Sea Flodd at Akranes
1990, Sea Flood at Eyrarbakki, Stokkseyri and beyond
1995, Avalanche at Súðavík and Flateyri
1996, Glacial Flood at Skeiðarársandur
2000, Southern quakes June 17 and 21.
2008, Southern quake May 29
2010, Volcanic eruption at Eyjafjallajökull
2011, Volcanic eruption at Grimsvötn
Since then, no large loss events have occurred, however each year smaller loss events occurr, that cause damages to few properties at a time, for instance due to floods.