Industry must adapt to new terrorism

In the wake of recent terror-related attacks, the insurance industry must expand its role of supporting the financial resilience of economies. This includes further clarifying the industry’s position alongside government-sponsored terrorism pools, according to Emma Karhan, managing director, Guy Carpenter.

“The recent actions of Daesh mark a shift in the focus of terror-related attacks with a focus on causing significant economic loss and long-term disruption in addition to the loss of life, instilling widespread fear and driving community division,” she said.

The attacks in Brussels targeted major infrastructure components, while the Paris attacks struck at key aspects of Western culture such as restaurants, bars and music venues, each causing major financial disruption.”

This shift in tactics to focus on causing increased economic damage requires the insurance industry to reassess its position.

“The industry needs to look beyond what it currently deems the insured loss component of a terror-related attack and consider the wider reaching and longer-term financial fall-out,” said Karhan.

“The potentially extensive business interruption repercussions from these attacks are not being adequately covered by the market currently and this needs to be addressed.”