Recent from talks
Terrorism insurance
Knowledge base stats:
Talk channels stats:
Members stats:
Terrorism insurance
Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities.[not verified in body]
It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very difficult to predict and the potential liability enormous.[not verified in body] For example, the September 11, 2001 attacks resulted in an estimated $31.7 billion loss.[citation needed] This combination of uncertainty and potentially huge losses makes the setting of premiums a difficult matter. Most insurance companies therefore exclude terrorism from coverage in casualty and property insurance, or else require endorsements to provide coverage.[not verified in body]
Concentration of risk is another factor in determining availability for terrorism insurance. Due to the concentrated losses of the World Trade Center, carriers were hit with large losses in one centralized location. Insurers seek to spread the coverage over a wider geographic area than as with other aggregate perils, such as flood.
Insurance companies are using an approach that is similar to that used with natural catastrophe risks. A Swiss report[citation needed] suggested that in this case where demand is greater than the supply for terrorism coverage that a short-term solution is possible: a mix of government and private resource to make easy the transition. In this situation, the government would serve two functions: to establish rules to overcome the capacity shortage and to be the insurer of last resort.
In France, a pool of insurers and reinsurers was set up on 1 January 2002 under the name Gestion de l'Assurance et de la RÉassurance des risques attentats et Actes de Terrorisme (GAREAT). GAREAT is constituted upon the principle of mutuality between its Members, all of whom are jointly liable, and relies on the support given to GAREAT by international reinsurers as well as by the French State which provides unlimited coverage to the GAREAT programme via unlimited treaties reinsured 100% by Caisse Centrale de Réassurance (CCR) [fr]. As a non-profit-making Economic Interest Grouping mandated by its Members, GAREAT returns to the latter that part of the premiums which are not used to finance the reinsurance coverage at the close of each year.[citation needed]
The Extremus Versicherung, founded in 2002, is a private company that insures terrorism risks in Germany. While the first 2.5 billion € in damages are covered by the insurance, the German government guarantees a further 6.5 billion € in insurance pay-outs.
Insurance payments related to terrorism are restricted to a billion euro per year for all insurance companies together[citation needed]. This regards property insurance, but also life insurance, medical insurance, etc.
The New York Times reports that in Baghdad personal terrorism insurance is available. One company offers such insurance for $90, and if the customer is a victim of terrorism in the next year, it pays the heirs $3,500.
Hub AI
Terrorism insurance AI simulator
(@Terrorism insurance_simulator)
Terrorism insurance
Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities.[not verified in body]
It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very difficult to predict and the potential liability enormous.[not verified in body] For example, the September 11, 2001 attacks resulted in an estimated $31.7 billion loss.[citation needed] This combination of uncertainty and potentially huge losses makes the setting of premiums a difficult matter. Most insurance companies therefore exclude terrorism from coverage in casualty and property insurance, or else require endorsements to provide coverage.[not verified in body]
Concentration of risk is another factor in determining availability for terrorism insurance. Due to the concentrated losses of the World Trade Center, carriers were hit with large losses in one centralized location. Insurers seek to spread the coverage over a wider geographic area than as with other aggregate perils, such as flood.
Insurance companies are using an approach that is similar to that used with natural catastrophe risks. A Swiss report[citation needed] suggested that in this case where demand is greater than the supply for terrorism coverage that a short-term solution is possible: a mix of government and private resource to make easy the transition. In this situation, the government would serve two functions: to establish rules to overcome the capacity shortage and to be the insurer of last resort.
In France, a pool of insurers and reinsurers was set up on 1 January 2002 under the name Gestion de l'Assurance et de la RÉassurance des risques attentats et Actes de Terrorisme (GAREAT). GAREAT is constituted upon the principle of mutuality between its Members, all of whom are jointly liable, and relies on the support given to GAREAT by international reinsurers as well as by the French State which provides unlimited coverage to the GAREAT programme via unlimited treaties reinsured 100% by Caisse Centrale de Réassurance (CCR) [fr]. As a non-profit-making Economic Interest Grouping mandated by its Members, GAREAT returns to the latter that part of the premiums which are not used to finance the reinsurance coverage at the close of each year.[citation needed]
The Extremus Versicherung, founded in 2002, is a private company that insures terrorism risks in Germany. While the first 2.5 billion € in damages are covered by the insurance, the German government guarantees a further 6.5 billion € in insurance pay-outs.
Insurance payments related to terrorism are restricted to a billion euro per year for all insurance companies together[citation needed]. This regards property insurance, but also life insurance, medical insurance, etc.
The New York Times reports that in Baghdad personal terrorism insurance is available. One company offers such insurance for $90, and if the customer is a victim of terrorism in the next year, it pays the heirs $3,500.