MAP Underwriting, one of the newest syndicates at Lloyd’s, has come up with an innovative and timely policy, aimed at protecting investors from losses caused by war and political violence in troubled areas like the Middle East.
“In fact the coverage is aimed mainly at reassuring investors in Israel,” said Ben Garston, political risk underwriter at MAP, who originated the idea following a recent business trip there. “While coverage would be available elsewhere, Israel is the primary market, as it has a well-developed high technology sector, which depends on foreign investment, and is therefore quite vulnerable,” said Garston.
“Investors Political Violence Insurance” is designed to supplement a company’s existing coverage, and to give protection in areas that may now be excluded. It identifies four major potential loss areas: “1) Physical damage to tangible Assets; 2) Forced Abandonment; 3) Personal Accident, and 4) Evacuation Expenses.
The current extremely volatile political climate in the Middle East, and the on-going confrontation between Israel and the Palestinians, understandably worries investors, Garston indicated. “This policy is intended to take away much of that political uncertainty, and so enable businessmen to concentrate on more mainstream commercial considerations.”
While it would cover losses from the current confrontation, other factors might further complicate the picture, which could cause more serious concerns. “Syria and Iraq are both capable of trying to take advantage of the situation,” said Garston, “and while an all-out war is possible, a more likely scenario would be increasing threats leading to confrontation and further mobilization of Israel’s forces. This could cause the temporary closure of factory sites, and require the evacuation of personnel.
MAP’s policy would mitigate the resulting economic losses. MAP’s policy should be of particular interest to California’s high tech companies, who are a major source of investment in Israel. Interested agents and brokers can obtain further information Ben Garston at MAP Underwriting in London. tel: 44 20 7709 3875
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