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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Terrorism and political violence

Credit, Political Risk and Terrorism

April 21, 2021

Broad civil unrest and political violence have raised concerns about coverage applicability and availability.
Rate predictions
  Trend Range
Terrorism and sabotage: Increase (Purple triangle pointing up) Flat to +10%
Political violence: Increase (Purple triangle pointing up) +10% to +20%

Key takeaway

An unprecedented period of broad civil unrest and political violence losses has raised concerns about coverage applicability and availability.

Domestic terrorism or civil commotion? Recent high-profile and costly outbreaks of violence perpetrated by extremist groups have provoked further discussion of how the terminology used to describe these events may affect the applicability of available coverage.

  • When relying on conventional property policies, businesses that have suffered protracted closures as a result of violence, but little in the way of physical damage, may find coverage does not apply, leaving them limited options.

Stand-alone terrorism rates are stable compared to upward trending all-risk rates. However, with increased claim activity, political violence rates are trending upward now.

  • Embedded terrorism (TRIA) coverage — coverage included in property and casualty programs — remains inevitably and, at the moment, disadvantageously linked to property and casualty market fluctuations.
  • Stand-alone terrorism programs continue to offer pricing stability, discrete limits and customized coverage, detached from the terms and conditions of parallel property and casualty programs.

A “precarious situation” is developing as ISIS regroups.

  • The UN Office of Counter Terrorism warns that despite a relatively quiet period of international terrorism, the socio-economic toll and political fallout of COVID-19 could render individuals receptive to radicalization and recruitment.
  • ISIS efforts to regroup and recruit have gained further momentum, and its 10,000 fighters may soon seek to exploit the distraction that the pandemic has brought to the international community’s counterterrorism efforts.

COVID-19 has accelerated innovation in the terrorism and political violence marketplace.

  • Electronic trading and automated policy administration have increased transaction speed in the Lloyds market.
  • The expectation is that these efficiencies will direct more resources to program development and product design — ensuring that coverages are right-sized to the needs of clients and reflect industry-specific exposures.

Analytics now offer greater accuracy in mapping, predicting and preventing loss from terrorism and other forms of violent attacks.

  • Analytics can help risk managers visualize exposures: risk concentrations, proximity to targets and likelihood of attacks.
  • Models can help determine appropriate coverage levels. The models calculate damage to insured portfolios by applying libraries of probable attack scenarios to the exposures.


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Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


Senior Director, Terrorism and Political Violence,
Financial Solutions

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