LONDON, June 12, 2013 (GLOBE NEWSWIRE) -- Several of the world's long-established terrorism insurance schemes were set up to deal with a different terrorism threat than is predominant today, according to a new technical guide produced by Airmic, the UK risk management association, in collaboration with Willis Group Holdings (NYSE:WSH), the global risk adviser, insurance and reinsurance broker.
"In general, long-established terrorism schemes were created to meet the challenges of domestic and/or separatist terrorism activity," according to the report. "As an example, the UK's scheme, Pool Re, was initially established to provide insurance for IRA losses not covered by the insurance market. Rates were subsequently reduced as the peace process progressed, but threats from other sources are now the major consideration that influences premium rates."
"Globally speaking, the terrorism threat is complex, nuanced and constantly evolving," said James Borrie, Executive Director in Willis' Terrorism and Political Violence Practice, and a lead author of the report. "Exposure to terrorism inspired by domestic separatism may have lessened in certain parts of the world. But the risk of 'lone wolf' violent extremists – such as the horrific Woolwich terrorist attack – represents a very different sort of threat."
"A large number of countries have terrorism insurance schemes and many of them were formed in response to the events of September 11, 2001," continued Borrie. "What this report highlights is that not all terrorism schemes offer identical coverage. Each scheme will have different terms and conditions with varying definitions of terrorism and different exclusions. This makes the design of a truly comprehensive global terrorism insurance policy very complex, requiring specialist professional advice."
Another potential issue for commercial insurance buyers is the range of weapons that terrorist could potentially bring to bear and the impact this could have. The use of chemical weapons, for example, could result in losses associated with infectious and contagious diseases and loss of access due to action by regulatory authorities. There could also be product recalls as a result of contamination, resulting in claims under all risks property damage/business interruption policies.
"Given all these factors, it is important that insurance buyers understand the scope of coverage that is offered and whether it is sufficient for their needs. In addition, insurance buyers should be aware of typical exclusions," commented Borrie.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. With roots dating to 1828, Willis operates today on every continent with more than 17,000 employees in over 400 offices. Willis offers its clients superior expertise, teamwork, innovation and market-leading products and professional services in risk management and transfer. Our experts rank among the world's leading authorities on analytics, modelling and mitigation strategies at the intersection of global commerce and extreme events. Find more information at our website, www.willis.com, our leadership journal, Resilience, or our up-to-the-minute blog on breaking news, WillisWire. Across geographies, industries and specialisms, Willis provides its local and multinational clients with resilience for a risky world.
Airmic represents UK-based risk managers and corporate insurance buyers. It has more than 1,000 members covering nearly 500 companies, including two thirds of those in the FTSE 100.
CONTACT: Media: Nathan Hambrook-Skinner + 44 2031 248 716 Email: email@example.com Investors: Peter Poillon +1 212 915 8084 Email: Peter.Poillon@willis.comSource:Willis Group Holdings