Research

Insurance Marketplace Realities: Terrorism and political violence

2018 Spring Update on Commercial Insurance in North America

April 12, 2018

Price prediction

  Trend Range
Terrorism and political violence: No change Flat

Key takeaway

The political violence and terrorism market continues to innovate, developing new products and updating existing ones to further meet changing risks and client needs.

Buyers should familiarize themselves with current coverage offerings.

The turbulence seen in the global political environment in 2017 is expected to continue throughout 2018, raising concerns over terrorism risks and outbreaks of political violence.

  • Terrorism liability and active shooter liability policies address the likelihood of lawsuits following an attack.
  • Active shooter and malicious attack policies have broadened their triggers to include weapons other than firearms, such as knives, motor vehicles, and explosives like grenades and body-worn devices.
  • Physical damage resulting from a cyberattack is being taken seriously in the marketplace, as technological advances may allow terrorist groups or other state-backed groups to wreak havoc on corporations and public utilities.

The marketplace is evolving to handle a steadily evolving risk landscape.

  • The destruction of ISIS caliphate does not downgrade the threat of global terrorism. The return of foreign fighters — upwards of 40,000 in total — to their homelands poses a critical risk.
  • An increase in loss frequency for active shooter/active assailant incidents, as well as the ensuing loss of attraction, has led to enhanced solutions and increased capacity for these risks.
  • U.S. market capacity for terrorism remains steady at around $4 billion.