Tim Holt, Head of Intelligence at Alert:24, part of Willis’s Special Contingency Risks (SCR), said:
“The tragic events in Paris are a continuation of a pattern that has been proliferating ideologically and spreading geographically over the last decade and which is not expected to diminish in the near future. Whilst attacks may be impossible to predict, recent trends suggest a movement towards ‘tactical low-tech’ but high impact assaults using guns, knives and vehicles, although a terrorist spectacular is still feasible. Threat levels in the UK, the rest of Europe and the USA have been elevated for some time and remain so.
However, other areas – such as North Africa, the Middle East, South and South East Asia (including Australasia) as well as parts of Western China – are increasingly exposed to Jihadist terrorism.”
More analysis of the attacks is available on Tim’s WillisWire blog here.
Andrew van den Born, Executive Director in Willis Political and Trade Credit Risk Practice, commented:
“Political instability continues to rise across the globe which has resulted in a heightened awareness generally amongst risk managers and investors alike. Heartrending events such as this serve as a reminder that the threat from political violence remains high and can come from unexpected quarters as it is almost impossible to predict. Demand for political risk insurance – which protects against the physical damage and disruption caused by politically motivated violence – is on the increase. This is matched by an increase in capacity. In fact, a surfeit of capacity in the market has resulted in recent years in a fall in price which is at odds with the increased risk landscape.”
James Borrie, Executive Director in Willis’s Terrorism Practice added:
“So far we have not seen any increase in demand for stand-alone Terrorism insurance as a result of these attacks. Europe has been on a ‘severe’ threat level for some time now, meaning that a terrorist attack is highly likely. In the UK, the terror threat level has not yet been raised to its most serious – ‘critical’. Commercial insurance buyers in Europe have been aware of the threat posed by international and home-grown terrorists for some time and have made insurance purchasing decisions based on that. Meanwhile, there is excess capacity in the insurance markets which will prevent premiums for Terrorism insurance increasing, at least in the short term. Most French insured’s have access to the country’s highly-successful terrorism pool, GAREAT, via their property insurer. The pool is reinsured by Lloyd’s.”
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