Demand for specialist cover peaks in UK

After many acts of terror, the demand for specialist insurance to cover losses arising from such happenings are increasing pressure on premiums, note underwriters and brokers.
Insurers have generally excluded the risks of such attacks from standard property, event cancellation or travel insurance policies since the 9/11 attacks in New York in 2001, though customers can ask for the addition of specialist cover known in the industry as “terrorism insurance”, according to a Thomson Reuters report.

Attacks in Paris, Istanbul and San Bernardino in California in the past year had made company boards increasingly concerned about safety even before the recent attacks in Brussels, said Tarique Nageer, Marsh.

“We have seen a change in demand as more of these events have occurred in more developed countries,” said Nageer, who heads Marsh’s New York department specialising in cover against such events.

The number of attacks and fatalities has risen sharply since 2011, insurance broker Jardine Lloyd Thompson said in a report published on Thursday, adding that the likelihood of further major attacks is expected to remain high.

The economic costs of the Paris attacks in November, which killed 130 people, were between USD9 billion and USD12 billion, the report said, though it added that insurance payouts on property losses are “likely to be minimal”.

Cover for such events allows the largest companies to recoup losses ranging from about $250 million to $1 billion, according to Russell Kennedy, a divisional director at insurer Brit.