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Mass shootings spur interest in coverage

Mass shooting

There were 63 mass shootings in the U.S. in the first two months of 2024, according to the Gun Violence Archive.

The independent data collection and research group, which tracks gun violence incidents, collected daily data from over 7,500 law enforcement, media, government and commercial sources on incidents in which a minimum of four persons were shot. 

Tracking annual data, the organization says there were 656 mass shootings in 2023, 646 in 2022, and 689 in 2021. Mass shootings jumped from 414 in 2019 to 610 in 2020.

“It does show a trend, and we are seeing that trend increase year on year,” said Claire Fisher, London-based crisis management underwriter for Aspen Insurance Holdings Ltd.

The rising profile of the incidents has drawn attention to active assailant insurance, which is still relatively new, having launched roughly eight years ago, brokers and insurers say.

“You do see an increasing number of clients becoming more educated about the products that are available,” said Tarique Nageer, New York-based terrorism placement advisory leader for Marsh LLC. 

Active assailant insurance varies by insurer. It can cover a range of exposures, including victim compensation and support, legal liability, property damage and business interruption. 

While the market remains small compared with established lines, the number of organizations that have purchased the coverage has increased by about 30% annually for the past four years, Mr. Nageer said.

The sector’s relatively short data history and the different forms used make it difficult to generalize about pricing, sources said.

Renewal prices track related lines, said Justin Peterson, Atlanta-based underwriter, deadly weapons protection, for Beazley PLC.

“We are seeing about that same, mid- to high single digits,” as in the stand-alone terrorism markets, he said.

Beazley offers up to $10 million of capacity in the U.S. for active assailant coverage and can access up to $30 million through Lloyd’s of London, Mr. Peterson said.

Rates are increasing in the sector on the back of increased frequency and higher court awards, said Tim Strong, London-based head of crisis management for Aspen. “We do keep seeing an increase in the frequency and severity of mass casualty events, which does need to be reflected in the underlying rates of clients,” he said.

The U.S is the largest market by premiums, according to Mr. Strong.

Renewals are higher but the increases are less than in 2023, said Morgan Shrubb, Atlanta-based head of terrorism North America for Axa XL, a unit of Axa SA. Some policyholders clearly have more exposure, she added.

Exposures vary “by the class of businesses, because obviously, there are higher risks in some classes than others,” Ms. Shrubb said, listing education and retail among the higher risk sectors. 

“It’s really everyone. We always say in the space that no one is immune from these types of events,” Mr. Peterson said, adding that organizations in the education, hospitality, health care, commercial and residential real estate, retail and nonprofit sectors show the most interest in active assailant coverage.

“It’s a very broad client base. Different sectors have different motivations for buying a policy,” Ms. Fisher said. A casino may have a very high daily revenue it wants to protect, while a hospital has its duty of care to patients. 

More capacity is entering the market, Mr. Strong said. “We have a maximum line of $25 million, but our average line is closer to $7 million.”

Services are a key part of the coverage, according to Mr. Strong. Aspen partners with a third-party security company to provide prevention training, which, depending on the size of the premium, could be online training, a seminar, or at the higher end an onsite visit with tabletop exercises and an analysis of the building to ensure there are suitable exit points and safety controls in place, he said.

Axa recently launched new active assailant wording to update its form and incorporate a wider range of services from a separate unit within the insurer charged with assembling vendors offering policyholder services, Ms. Shrubb said.

“What we’re doing is offering pre-, during and post-event services,” such as dark web sweeps or a security team helping mitigate exposures should there be a threat of an active assailant event at a policyholder location, Ms. Shrubb said.

“When we speak about our product, we probably spend 70% to 80% talking about the prevention and response efforts,” Mr. Peterson said. 

Policyholders usually renew active assailant coverage annually, Mr. Strong of Aspen said.

“It has the highest retention rate of all our product lines within this space. It does seem when clients buy into it, they do tend to stick with it,” he said.

Geography, frequency play role in assailant insurance inquiries

As active assailant events proliferate, particularly mass shootings in the U.S., their scope has expanded geographically, raising concerns about the threat in a wide variety of locations and broadening demand for coverage, sources say.

While urban areas are often perceived as more exposed to violent incidents, events such as the October 2023 mass shooting in a bowling alley and then a bar in Lewiston, Maine, which left 18 dead and 13 injured, show that rural areas are also vulnerable. 

Inquiries for active assailant coverage tend to increase after an event, and insurers say that such interest can have a regional emphasis.

“Whenever an event happens, we see an uptick, especially in the area” of the incident, said Morgan Shrubb, Atlanta-based head of terrorism for Axa XL, a unit of Axa SA. An event in Texas, for example, could drive increased interest from brokers across the state, she said.

“We do tend to see a larger regional increase when events happen close to where they are located,” said Justin Peterson, Atlanta-based underwriter, deadly weapons protection, for Beazley PLC.

Increasingly far-flung events challenge assumptions over security, he said.

“People start questioning that ‘It can never happen to me’ mentality,” Mr. Peterson said. “That’s why we start seeing a little bit of a regional uptick when we have these types of events.”

“It can be a major wake up call for locals in the area where they realize this could occur at their properties, schools, universities or places of worship. This feeling of vulnerability combined with the prevalence of shootings will typically cause a spike in the demand,” said Seán McCabe, an attorney in the New York office of Anderson Kill P.C. and a member of the firm’s government enforcement, internal investigation and white-collar defense group.