Global speciality insurance and reinsurance group, Chaucer, has highlighted growing demand in Mexico for insurance protection against cartels and other organised crime, driven by cartel activity spreading into new areas and greater demand from sectors outside of tourism and leisure.
Chaucer explains that damage caused by cartel violence is excluded under standard Property Damage and Business Interruption policies, but with activity on the rise across the country, businesses of all shapes and sizes have looked to purchase additional “organised crime cover” for property damage and business interruption as a result of cartel violence.
In the past, multinationals with operations in Mexico and companies in the tourism and leisure industries drove demand for this type of insurance. Now, though, local businesses across a wider range of sectors are increasingly seeking protection against cartel violence, with Chaucer noting that coverage is now regularly purchased for factories and other industrial sites, warehouses, and even toll roads.
At the same time, cartel violence is spreading into areas previously relatively unscathed by cartel activity, including popular tourist areas such as Cancun, which is also driving demand for insurance protection.
“Over the last decade cartel activity has become more dangerous – hitting wider segments of the Mexican economy. In some cases the cartels have deliberately targeted innocent businesses as part of their efforts to intimidate politicians and the state, for example attacks on retailers,” said Gabriel Mayorga, Political Violence Underwriter at Chaucer.
“We are seeing more and more businesses purchase cartel insurance due to concerns that they too will be hit by this violence,” added Mayorga.
