Opportunities for the development of the forest insurance sector

The article is devoted to the important and timely issue of forest insurance. Its aim is to identify the perspectives of the forest insurance sector’s development. The conducted analysis is focused on finding answers to the following research questions: 1) what the conditions for the development of the forest insurance market are, 2) which forest policy instruments can influence/stimulate the development of the forest insurance market, 3) and which models contain the most suitable results of insurance rate simulations and present the best theoretical and methodological foundations of financial insurance in forestry. A Web of Science (WoS) database literature review was conducted to find relevant publications. The keywords ‘forest’ and ‘insurance’ were used. In the first phase of the review, the search yielded 805 publications. Of these, 120 publications published in forestry journals were selected on the basis of a content investigation of the abstracts. A detailed analysis of these selected publications, including a review of the scope of the research, enabled us to select 24 studies that dealt exclusively with the topic of forest insurance. The literature review showed that the development of the forest insurance idea is primarily taking place in countries with a high proportion of private forests. The increased interest in forest insurance in the literature of the 21^st century results from the observed magnitude of biotic and abiotic disturbance impacts. Apart from the value of the forest to be insured, the amount of the premium is determined by several factors including the type and probability of disturbances and the costs of forest management. Given the level of theoretical insurance premiums, the value of which is unacceptable to forest owners, efforts should be made to popularise the idea of property insurance in the forest. This solution enables a significant reduction in the premium per unit of value of the insured forest as the probability that the forest will be damaged by disturbances is low. If the probability that the tree stands will be significantly damaged is high, it is unlikely that the same events will occur at the same time and cause major damage. The first step in developing the idea of forest insurance should be a study that assesses the structure and volume of demand for forest insurance. Efforts must be made to create a database on the frequency and extent of forest disturbances and to develop a method for valuing timber resources.