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Current events pique interest in wider cover

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Nuclear, chemical, biological and radiological terrorism insurance, though least often bought and most expensive of the terrorism coverages, is generating increased interest, according to industry sources.

NCBR, as it is known, has even more recently been re-dubbed CBRN — chemical, biological, radiological and nuclear — with nuclear being demoted to last because it is seen as the least likely type of attack to occur, one source said.

The March nerve agent attack in Salisbury, England, on a former Russian military official and British spy, though not viewed as a terrorist attack, was the first offensive use of a nerve agent in Europe since World War II, according to an April 30 terrorism report from Pool Reinsurance Co. Ltd., which also noted loss-of-attraction issues and potential insurance coverage gaps associated with the incident. The U.K. government has accused the Russian government of being behind the attack.

News reports of chemical attacks in some regional conflicts, notably in Syria, have also heightened awareness, sources said.

“We’ve seen a pickup in demand for NCBR” amid concerns that chemical weapons could migrate from the battleground into the developed world, said Ben Tucker, head of U.S. terrorism and political violence insurance for XL Group Ltd. in New York.

Although capacity has expanded, pricing remains the highest among terrorism products and factors prominently in buying decisions, sources said.

NCBR “is still the most expensive terrorism product out there,” said Tarique Nageer, terrorism placement and advisory practice leader for Marsh USA Inc. in New York. Chemical industry firms, some retailers and hospitals are “quite interested” in the product, “but the cost remains a barrier to buying the product. It remains very expensive,” he said.

Of the various terrorism coverages offered, NCBR/CBRN has traditionally sold the least for Hiscox Ltd., said Jennifer Rubin, the insurer’s vice president for war, terrorism and political violence in New York. “I think people are thinking about it because they’re hearing about it in the news, but when they see the limit and cost, they take a step back.”

The most frequent buyers of the product are municipalities with water treatment facilities concerned about what it would take to clean them up, she said.

Wendy Peters, executive vice president of financial solutions-terrorism and political violence for Willis Towers Watson P.L.C. in New York, said she has seen more interest in CBRN coverage, and adds that capacity has grown to some $600 million per risk.

 

 

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