Airmic-Willis terrorism insurance research
Several of the world's long-established terrorism insurance schemes were set up to deal with a different terrorism threat than is predominant today, according to a new technical guide published by Airmic at the annual conference in collaboration with Willis Group Holdings.
"In general, long-established terrorism schemes were created to meet the challenges of domestic and/or separatist terrorism activity," according to the report. "As an example, the UK's scheme, Pool Re, was initially established to provide insurance for IRA losses not covered by the insurance market. Rates were subsequently reduced as the peace process progressed, but threats from other sources are now the major consideration that influences premium rates."
"Globally speaking, the terrorism threat is complex, nuanced and constantly evolving," said James Borrie, Executive Director in Willis' Terrorism and Political Violence Practice, and a lead author of the report. "Exposure to terrorism inspired by domestic separatism may have lessened in certain parts of the world. But the risk of 'lone wolf' violent extremists - such as the horrific Woolwich terrorist attack - represents a very different sort of threat."
"A large number of countries have terrorism insurance schemes and many of them were formed in response to the events of September 11, 2001," continued Borrie. "What this report highlights is that not all terrorism schemes offer identical coverage. Each scheme will have different terms and conditions with varying definitions of terrorism and different exclusions. This makes the design of a truly comprehensive global terrorism insurance policy very complex, requiring specialist professional advice.
“It is important that insurance buyers understand the scope of coverage that is offered and whether it is sufficient for their needs. In addition, insurance buyers should be aware of typical exclusions."
The report can be downloaded here
