Terrorist groups such as Islamic State have shed light on gaps in the offering of terrorism insurance which offers an opportunity to grow for some carriers.
The nature of the risks which insurers have traditionally been asked to underwrite has shifted and evolved in line with the threats faced by today’s businesses, said Julian Enoizi, chief executive, Pool Re, speaking to Intelligent Insurer for a wider feature looking at trends and topics for 2017 (click here for full feature).
“The horrific acts committed by Daesh (so-called Islamic State) and other like-minded groups have laid bare the gaps in the coverage offered by the market,” Enoizi said. “Attacks on cities across the globe have resulted in large scale economic loss, significant loss of life, but very limited insured losses. This is unsustainable. This is an area in which we can do more to safeguard our economies and will be a key focus for Pool Re in 2017.”
Increasingly, many insurance products do not reflect the full extent of the threat or provide cover for the risks which concern risk managers, Enoizi noted.
On December 19 a truck ploughed into a crowded Christmas market in central Berlin, killing 12 people and injuring 48 others, some seriously, in what Germany's interior minister said looked like an attack.
This is just the latest in a number of recent attacks in Germany, which included a teenager shooting dead nine people in Munich in July.
Germany is one of more than 45 countries around the world where the threat from terrorism is rated "high" by the Foreign Office, including France, Spain, the UK and Australia.
However, there are others risks, which will become increasingly apparent in the coming years and for which our industry may be ill-prepared to cover, Enoizi said. He pointed to the rapid pace of technological advancement, with the development of virtual reality and alternative reality type products. “Historically our industry has been slow to adapt to new technologies and tailor our products accordingly,” he noted.
The deployment of new digital technologies is making society more vulnerable which may present opportunities for carriers to develop and sell new products.
“Cyber terrorism will undoubtedly be employed as a means of attack by terrorists. By including cyber in our property terrorism policies our market can set the standard for terrorism insurance across the globe,” Enoizi said.
Pool Re is planning to take advantage of this opportunity and expand its product offering.
“In 2017 Pool Re will expand its property damage cover to include damage resulting from a cyber trigger. Efforts such as this can make businesses in the UK safer and the insurance industry has a vital role to play in ensuring that Britain remains an attractive place to do business,” Enoizi explained.
In total senior executives from companies including Swiss Re, Argo, AM Best, Moody’s Markel, Advent, Barbican, Brit, Ed, Fitch, S&P Global Ratings and Willis Re participated in the piece looking forward to 2017. To read the full transcript of their thoughts and comments, please click here.
Pool Re, Europe, Julian Enoizi, Insurance, Reinsurance, Risk management, Terrorism, Australia, Cyber, Islamic State