European terror attacks drive uptick in event coverageReprints
The deadly terrorist attacks in Paris and Brussels have prompted some buyers to add event cancellation and related coverage to their terrorism insurance programs in addition to reassessing their security procedures.
“We have seen a definite uptick in both inquiries and orders related to terrorism coverage related to events,” said Averil Gray, a London-based director at Aon Risk Solutions, a unit of brokerage Aon P.L.C. “This interest has been primarily focused on Europe, but we are also seeing more orders out of the U.S.”
In Europe aside from buyers in France and Belgium, buyers in the Netherlands and Germany also are more interested in terrorism coverage, she said. And demand has increased for events cover in Turkey.
Since the terrorist attacks in Brussels in March and in Paris last November, buyers have shown more interest in event cancellation coverage, said Tim Davies, head of sabotage and terrorism at specialty insurer Sompo Canopius in London.
As well as transport hubs, the recent attacks included bombings and shootings at a concert at the Bataclan theater in Paris, where 89 people were killed, and a failed attack on a soccer match at France's national stadium, the Stade de France in Paris, for example.
Cafes and restaurants also were targets.
Insurance buyers concerned about the risk of business interruption losses if a terrorist attack or political violence occurs have increased inquiries, Mr. Davies said. Relatively low rates for terrorism coverage have prompted many buyers to add liability and event cancellation, for example, to their coverage, he said.
Event cancellation cover is a “trend that has been growing in recent years with uncertainty and unpredictability around weather patterns, political turmoil and, more recently, terrorism targeted at entertainment and sporting events,” Ms. Gray said.
After the January 2015 terrorist attack on the Paris offices of French satirical magazine Charlie Hebdo, “there was generally a nervousness in France and Europewide” about the terrorist threat, said Chris Rackliffe, focus group leader and underwriter of political risks and contingency at insurer Beazley P.L.C. in London.
The subsequent attacks at the Stade de France and Bataclan in November “awakened event organizers” to a changing terrorist threat, which prompted event organizers to “look at their risk management and also address coverage,” he said.
There has been an increase in both inquiries and orders for coverage, he said.
While terrorism coverage rates shot up after the Sept. 11, 2001, terrorist attacks in the United States, they have been falling in recent years while the coverage available has broadened, Mr. Rackliffe said.
Lloyd's of London and London-market insurers have responded to the changing nature of the terrorist threat while other European markets have reduced their underwriting appetite, he said.
Particularly in the wake of the Stade de France attack, sports clients have taken a closer look at event cancellation and abandonment coverage, said Richard Tolley, Birmingham, England-based practice leader of Europe, Middle East and Africa sports and events at brokerage Marsh L.L.C.
The three suicide bombers who blew themselves up outside the stadium that was hosting a soccer match between France and Germany attended by French President Francois Hollande “perhaps sharpened the focus on static security guards” who pat attendees down before they enter a stadium, Mr. Tolley said.
The first of the three suicide bombers was prevented from entering the stadium by a security guard who patted him down and noticed a bomb vest. The attack also refocuses attention on what spectators can bring to such events, he said.
The Brussels attacks have resulted in various security procedure changes, such as moving screening away from terminal buildings, he said.
Event risk managers also have focused on other ways they can reduce risks, such as changing how close vehicles can be to sporting events, Mr. Rackliffe said.
It is vital that event organizers avoid higher-threat locations or areas where political or terrorist threats may not be well-managed, Ms. Gray said.
“The ability for a city or country to recover quickly from any fallout should influence a risk manager's choice of location,” she said. “High-level security budgeted for in the first place will reassure underwriters that the risk within the insured's control — within the venue — is being well-managed.”