Willis Group Holdings has released a summation of its presentation on terrorism insurance at the General Arab Insurance Federation (GAIF) conference in Bahrain.
The global broker notes: “Despite a number of recent terrorist attacks occurring on Middle East and North African soil, the take-up of terrorism insurance by companies in the region is still extremely low. To demystify this often complex class of business and to highlight the commitment of the London market to partner with insurers on developing solutions for this specialist class.”
Willis’ bulletin describes the address by, guest speaker David James, a Senior Underwriter from Ascot’s Terrorism & Political Risks Insurance practice, to 200 insurers, brokers and reinsurers at a break-out session at GAIF’s 27th general conference.
James stated “Over 23 percent (numerically) of terrorist attacks occur in the Middle East and North Africa, however this region accounts for only 4 percent premium spend in Ascot’s total terror portfolio. This is in stark contrast to North America, the biggest buyer of terrorism insurance, who accounts for some 26 percent of Ascot’s terror portfolio, despite a relatively small number (1.2 percent) of terrorist attacks.”
He did note, however, that the volume of terrorism cover being purchased in the Middle East is increasing. Lenders, who are funding massive developments in the region, increasingly require comprehensive policies to include terrorism cover. “There is a growing need for local insurers to provide terrorism cover, but it seems that many avoid writing this class of business as it is does not form part of their traditional book and they do not have reinsurance treaty protection in place,” James observed. “The Lloyd’s market however has significant specialist expertise and skills in this niche area to partner with local insurers on tailored solutions for Middle Eastern companies.”
Commenting on the significant growth of this class of business globally, Alex Clayton, Willis Global Markets Terrorism Practice Leader stated: “Since 9/11, the terrorism insurance market has undergone a rapid evolution with market capacity increasing from $50 million in 2001 to around $1.4 billion today. As a result of this evolution, terrorism cover has become more attractive in price and broader in coverage with wordings being tailored directly to the needs of our clients. Our aim today is to bring insurers up to speed on these latest developments and to commit to working together to offer market-leading solutions to our clients in the Middle East.”
Source: Willis Group Holdings – www.willis.com