A study of equine risk and its insurance in Malta

Abstract

Horses have accompanied mankind throughout history for thousands of years. Nowadays, they are mainly viewed as recreational animals, used as pets or for various sports. This dissertation aims to identify the risks faced by horse owners in Malta and how they go about mitigating them. It also aims to fill a gap in Maltese literature regarding the equine sector. The primary findings were gathered through interviews with horse owners and insurance representatives. The findings show that Maltese horse owners take various practical measures to mitigate risks such as illnesses and mortality. They are worried that their horses get spooked by events that may occur on open roads, causing the horses to bolt, and injure third party people or property. For this risk, mandatory third party liability insurance is coming into force through a new law which regulates animals on the road, therefore establishing new responsibilities for horse owners. Third party liability insurance is available from Maltese insurers. Insurance for other risks such as veterinary expenses and mortality is not available from Maltese insurance companies. If available at a reasonable price, some horse owners would buy cover for these risks. Others did not feel that insurance for these risks is necessary. Insurance representatives had a positive claims experience so far with their respective third party liability schemes. However, they were sceptical about the possibility of a local insurer coming up with a potential product insuring equine risks. The main reason for this was that expected demand for this product is low, and premiums collected would not be able to cover perceived claims. Furthermore, past experiences when such products were offered were negative, due to fraudulent claims. Therefore, it is improbable that an equine insurance product would be introduced by local insurers in the coming years.