Yesterday evening’s shootings in Paris, France, in which a police officer was killed and others wounded, highlights the need for insurance and reinsurance markets to offer broader terror cover, including business interruption.
The attack occurred on the busy Champs Elysees, an area that was naturally full of tourists in the evening and very close to key tourist attractions including the Eiffel Tower.
It’s natural that after such events there can be a knock-on effect on tourism demand, as well as local business interruption.
Terrorism linked business interruption seems to be on the rise, with locations afflicted by attacks likely impacted across their local and regional economic performance.
Terrorism insurance and reinsurance does not always make allowances or include coverage for any interruption to business and productivity, but as frequency and the mode of attack has changed in the last few years, including this coverage is becoming a hotter topic.
Dr Gordon Woo, an expert on terrorism risks at risk modelling firm RMS, commented on the attack and explained; “Whilst a police officer was killed, tragically, and two others were wounded in this attack, there was no damage to property. However, choosing the Champs Elysées as the location for the shooting – which is the most famous street in Paris and popular with international visitors – could have an impact on tourism.
“Across western Europe, the terrorism insurance pools are now considering ways to strengthen economic resilience against terrorism, such as providing cover for business interruption where little or no property damage is done.”
It’s encouraging to hear that the regional terrorism insurance pools, which either provide direct insurance or back insurers with specific terrorism reinsurance, are looking to adjustments to coverage to increase resilience.
It’s important that the impact of terror attacks to local economies are minimised as much as possible, insurance and reinsurance should play a key role in this.
Tragic attacks such as the one sadly seen in Paris yesterday highlight the importance that the world has the tools available to it for resilience to be enhanced and economic activity to recovery rapidly with as little impacts as possible.