Modern Approaches to Circular Insurance

Abstract

The objective global need for the continuous development of the circular economy requires the promotion of essential elements of contribution, which are inclusively linked to the implementation of related insurance products united in a general notion of circular insurance. This involves applying circular economy principles to risk management and the insurance sector. This approach transitions from a linear model of "take-make-throw" or "pay-repair-replace" to one emphasizing repair, reuse, refurbishment, and waste reduction. The focus shifts from merely compensating for losses to actively preventing them and maintaining asset value. The research on the topic was based on examining information from open sources published on the Internet. The purpose of the paper was to present the conceptual aspects of circular insurance. Creating circular insurance requires transforming the sector from a traditional "take-make-dispose" approach to one that prioritizes resource efficiency, minimization of waste, and the ongoing utilization of materials. Essential strategies encompass promoting repair rather than replacement, providing products based on usage. These activities can be related to promoting new business models like sharing and Product-as-a-Service (PaaS), and facilitating the reuse of materials. Supporting the circular economy through insurance requires the development and implementation of new insurance products. In this context, leveraging technology and data becomes of great importance. At the same time, the development of circular insurance is linked to overcoming a wide range of challenges. UDC: 368.013:502.131.1; JEL: G22, Q56, G4