Lloyd's: terror concerns slow growth.Writers of terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities.
It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very within Lloyd's have seen considerable expansion over the past decade, and while capacity is adequate, higher reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. cover costs and emerging political risks look to dampen that growth.
Michael O'Connor Michael O'Connor can refer to more than one person:
O'Connor estimates per-risk capacity within Lloyd's at $1 billion, with a further $500 million each available in Bermuda and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The involvement of Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. could take the total to $3 billion.
Chris Parker, political violence underwriter at Beazley Group, said per-risk global terrorism capacity "is somewhere in the region of $2 billion.
But that would be for a very straightforward benign risk in a country where everyone's got available aggregate."
The Lloyd's market could probably provide about $1.5 billion in per-risk capacity, he said.
Stephen Ashwell, global product head of political violence at Hiscox plc, estimated terrorism premium income at Lloyd's at a "fairly steady" $500 million a year. "It's grown a little bit in the last two or three years," he said.
Listen to interviews with Stephen Ashwell and Michael O'Connor at http://www.bestreview.corn/audio.
Fading Priority Companies see themselves as generally prepared for terrorism threats, but see the risk as less of a priority than others. Priority Preparedness Overall 5.4 6.5 Cyber Attacks (Malicious) 5.3 6.0 Theft of Assets or Intellectual Property 5.2 6.1 Fraud and Corruption 5.4 6.3 Cyber Risk (Non Malicious) 5.1 6.2 Strikes or Industrial Action 4.2 5.8 Piracy 3.9 5.6 Terrorism 3.9 5.0 Riots and Civil Commotion 3.7 5.1 Expropriation of Assets 3.4 5.2 Abrupt Regime Change 3.3 4.8 Source: Lloyd's Risk Index 2011 Note: Table made from bar graph.