According to WTW, rates have continued to edge upward along with the threat of terrorism, sabotage and political violence on several fronts.
The crisis in Ukraine has given rise to widespread questions about insurable risk and the application of war exclusions.
As hostilities, catastrophic damage and the application of sanctions grow, the insurance and reinsurance marketplace is braced for significant losses, with major specialist carriers already experiencing a drop in share value.
The broker explained that insureds in the region will be closely evaluating coverage for loss due to war, generally excluded from property policies.
Concern also surrounds the application of the five powers war exclusion, which withdraws coverage from any conflict between two or more of these nations: Russia, United Kingdom, United States, China and France.
According to the broker, sanctions may also impact companies’ losses in Russia and Belarus, as certain governments may prohibit payment of claims if in violation of sanction law.
An increase in incidents of civil unrest is anticipated as antiwar sentiment and food shortages increase.
Insurers continue to offer a wide spectrum of dedicated products designed to mitigate the consequences of an act of terrorism or civil unrest — and, if possible, prevent such acts.
Despite the increasing threats and incidents, market capacity for terrorism and political violence remains steady, though WTW anticipates rates to trend upwards as losses accumulate.
A new generation of crisis management analytical tools offers quantitative and qualitative intelligence with respect to risk concentrations, proximity to potential targets and threat hot spots.
Captive insurance structures remain a vehicle to access the indemnities provided under TRIPRA (Terrorism Risk Insurance Act 2019), delivering enormous capacity and broad coverage scope.
