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Survey Report

Insurance Marketplace Realities 2022 – Terrorism and political violence

Credit, Political Risk and Terrorism
N/A

November 15, 2021

Despite prolonged periods of civil unrest and elevated levels of threat from organized domestic extremists and long-wolf shooters, the market continues to attract new entrants.

Rate predictions

Rate predictions: Terrorism and political violence
  Trend Range
Terrorism and sabotage Neutral increase (flat yellow line, arrow pointing up and down) -5% to +5%
Political violence Increase (Purple triangle pointing up) +10% to +15%
Active assailant Neutral increase (flat yellow line, arrow pointing up) Flat to +5%

Key takeaway

Despite prolonged periods of civil unrest and elevated levels of threat from organized domestic extremists and lone-wolf shooters, the market continues to attract new entrants.

Domestic extremism is now the greatest domestic threat…

  • In a significant shift in stance from their predecessors, the new U.S. attorney general, the homeland security secretary and the FBI have warned that the greatest domestic threat now comes from “racially or ethnically motivated violent extremists.”

…yet the potential for international terrorist attacks remains.

  • The recent withdrawal of troops from Afghanistan and the reestablishment of the Islamic Emirate of Afghanistan has raised concerns about the potential reemergence there of a terrorist hub and launchpad for future attacks.

We are seeing a renewed focus on cyberattacks.

  • In the wake of regular cyberattacks targeting high profile organizations and infrastructure assets, risk managers are renewing their focus on exposure to first-party physical damage and resulting business interruption from malicious cyber events. New products in the marketplace offer broad coverage triggers that reflect the difficulty in determining motive and/or culprit in such attacks.
  • Notwithstanding these market innovations, the capacity requirements of many organizations can still only be met through the deployment of captives to access TRIA protections.

The market holds steady.

  • Despite the exposures, market capacity for terrorism and political violence risks continues to expand, which helps suppress upward price pressures put forward by incumbent carriers.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. 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 advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Contact

Senior Director, Terrorism and Political Violence,
Financial Solutions

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