Airmic and Willis Terrorism Review Explores the Scope and Cover Offered by
Insurance Schemes Around the World
LONDON, June 12, 2013 (GLOBE NEWSWIRE) -- 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 produced by Airmic, the UK risk management association, in
collaboration with Willis Group Holdings (NYSE:WSH), the global risk adviser,
insurance and reinsurance broker.
"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
"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."
Another potential issue for commercial insurance buyers is the range of
weapons that terrorist could potentially bring to bear and the impact this
could have. The use of chemical weapons, for example, could result in losses
associated with infectious and contagious diseases and loss of access due to
action by regulatory authorities. There could also be product recalls as a
result of contamination, resulting in claims under all risks property
damage/business interruption policies.
"Given all these factors, 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,"
Willis Group Holdings plc is a leading global risk advisor, insurance and
reinsurance broker. With roots dating to 1828, Willis operates today on every
continent with more than 17,000 employees in over 400 offices. Willis offers
its clients superior expertise, teamwork, innovation and market-leading
products and professional services in risk management and transfer. Our
experts rank among the world's leading authorities on analytics, modelling and
mitigation strategies at the intersection of global commerce and extreme
events. Find more information at our website, www.willis.com, our leadership
journal, Resilience, or our up-to-the-minute blog on breaking news,
WillisWire. Across geographies, industries and specialisms, Willis provides
its local and multinational clients with resilience for a risky world.
Airmic represents UK-based risk managers and corporate insurance buyers. It
has more than 1,000 members covering nearly 500 companies, including two
thirds of those in the FTSE 100.
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