The Terrorism Pool Index:
Review of terrorism insurance
programs in selected countries
2018/2019
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Willis Towers Watson is grateful to the International Forum for Terrorism (Re)Insurance Pools (IFTRIP) for
the support in the production of this report. IFTRIP and Willis Towers Watson have made all reasonable
attempts to ensure that the information in this report is correct as of September 2018. The terms and
conditions of the various pools, funds and schemes vary from time to time; the advice of an insurance
professional should be sought before making decisions relating to terrorism insurance.
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Foreword .................................................................................................................3
Schemes for terrorism insurance in selected countries
Australia ............................................................................................................7
Austria .............................................................................................................. 9
Belgium ............................................................................................................11
Denmark .........................................................................................................13
Germany .........................................................................................................19
France ............................................................................................................15
India .................................................................................................................. 21
Israel ...............................................................................................................23
Spain ................................................................................................................31
Russia ............................................................................................................. 27
United States of America ........................................................................ 35
Netherlands ..................................................................................................25
United Kingdom ..........................................................................................33
South Africa .................................................................................................29
Summary of terrorism insurance arrangements in other territories
Sri Lanka........................................................................................................40
Hong Kong ....................................................................................................39
Bahrain ...........................................................................................................38
Taiwan .............................................................................................................41
Namibia ..........................................................................................................40
Africa ..............................................................................................................38
Switzerland ....................................................................................................41
Indonesia ....................................................................................................... 39
Finland ............................................................................................................ 39
Northern Ireland .........................................................................................40
Summary of pools .............................................................................................43
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Dear reader,
Predicting and managing exposures from global terrorism events remains a
complex challenge to commercial insurance and reinsurance markets. The
resultant shortfall in sucient risk transfer options highlights the importance
of the role of government-supported terrorism insurance schemes in
addressing this market decit. Global terrorism insurance pools continue to
evolve their scope and scale to provide the requisite response and stability for
global companies to operate securely.
In collaboration with Pool Re and global members of the International Forum
for Terrorism Risk Insurance Pools (IFTRIP), Willis Towers Watson Financial
Solutions is pleased to present the following Terrorism Pools Index. This
report provides an overview of the features of many of the key terrorism
schemes in existence across the world.
The features of the main terrorism insurance schemes are outlined in the rst
section of this report and brief information on some other terrorism schemes
is provided in the second section. The information provided is for general
guidance only; insurance buyers should obtain appropriate professional
advice when designing and implementing global and local terrorism insurance
arrangements.
If you would like to discuss any of the topics in the pages of this Index, please
do not hesitate to contact me or any member of the Willis Towers Watson
Financial Solutions team.
Yours sincerely,
Paul L. Davidson
Chairman and CEO
Financial Solutions
Willis Towers Watson
The Terrorism Pool Index:
Review of terrorism
insurance programs in
selected countries
2018/2019
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Foreword
This report captures the key features of the
prominent terrorism pools, funds and schemes.
Terrorism risk continues to be on the agenda in board
rooms around the world, and the daily coverage across all
forms of media means that it is likely to remain a pressing
risk for all organizations for the foreseeable future. Much
has changed since the attacks on the U.S. in 2001 and,
indeed, since the bombing of the King David Hotel in
Jerusalem in 1946, which led to the rst recognizable
terrorism insurance wordings. While the threat and the
responses to terrorism evolve, the requirement for eective
transfer of the risk remains.
On many occasions, most notably after 9/11, commercial
insurance markets have been unable or unwilling to
provide eective cover in the immediate aftermath of a
major terrorism loss. This absence of cover has generated
strategic knock on impacts for the commercial property
market. To overcome these deciencies, many governments
introduced state-backed terrorism pools, funds and
schemes. Recent research by CASS Business School in
London has described such arrangements as protection
gap entities (PGEs). In 2015 a number of these terrorism
PGEs came together to form the International Forum for
Terrorism (Re)Insurance Pools (IFTRIP).
This report captures the scope and key features of
prominent terrorism PGEs. The rst section contains
detailed information on 14 schemes, including their
denitions, scope of cover aorded and current premium
rating metrics. The second section oers a summary of
terrorism insurance arrangements in select other countries.
We have also provided a quick reference guide at the end
which allows rapid comparison.
While providing context for the scope of coverage aorded
by these programs, this report provokes additional
questions:
To what extent is the changing nature of the threat
inuencing the purchase of terrorism insurance?
What is the primary driver for the continuing existence of
the schemes?
What would constitute a major loss?
What role should the commercial market ll?
Analysis of various terrorism PGEs has been undertaken,
but inevitably we have not captured all arrangements
that exist. Any organization seeking to make a terrorism
insurance purchase should seek the advice of an
appropriately qualied and experienced advisor.
To what extent is the changing nature of the
threat inuencing the purchase of terrorism
insurance?
Most terrorism PGEs were created in the aftermath
of September 11, 2001. Those that pre-date 9/11 were
primarily created in response to domestic terrorism
issues, often from separatist movements. Many of those
earlier events, such as the ETA attacks in Spain and the
PIRA attacks in the United Kingdom, involved the use of
large explosive devices. Much has been written about the
dynamic nature of terrorist attack methodologies in recent
years, but the general consensus is that the perpetrators’
emphasis has shifted. Previously, the most prominent
attacks generated catastrophic physical damage against
infrastructure and required signicant planning and
expertise — now we see comparatively smaller attacks
targeting people, using easily accessible weapons, such
as rearms, bladed weapons and vehicles, with a lower
planning burden and low technical barrier to entry.
The absence of an event causing catastrophic property
damage losses in a developed nation in the 17 years
since 9/11 has in itself had an impact on the market, not
least on the debate about the requirement for terrorism
PGEs. The threat of a major attack has not disappeared,
but the barriers to entry are potentially greater than they
were, particularly with improvements in counter terrorism
eorts. The emergence of social media and secure mobile
communications (Facebook was launched in February
2004, Twitter in July 2006 and WhatsApp in June 2009)
has undoubtedly enabled terrorist organizations to not
only spread their message more eectively but also
directly communicate with followers. This benet has been
somewhat neutered by governments and law enforcement
improving their ability to identify and interdict terrorist
plots. Given claim experience, clients understandably
view a catastrophic event as less likely than a marauding
terrorist rearms attack or the use of a vehicle as a
weapon. However, despite this shift in the nature of the
threat and the perception of the most likely risks, most
property-owning organizations continue to purchase
“traditional” terrorism insurance, either from terrorism
PGEs or the stand-alone market.
Beyond the possibility of a large improvised explosive
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device or the use of an aircraft as a combined kinetic
and explosive weapon, two other threats continue to
drive clients toward the purchase of traditional cover
from terrorism PGEs; the threat of a nuclear, chemical,
biological or radiological (NCBR) event and the potential
for catastrophic cyberterrorism. The challenges in
modeling these risks mean that meaningful cover is still
primarily aorded by the terrorism PGEs, rather than by
the stand-alone market.
New and innovative products are available from some
commercial insurers providing extended non-damage
business interruption protection. These solutions also
often include a range of crisis management expenses,
whether relating to public relations support, post-
event counseling or the support of a security and risk
management vendor. The penetration of these products
is not currently as high as traditional terrorism, although
we do see demand increasing.
While some terrorism PGEs have responded innovatively
to the changing threat (most notably Pool Re in the
U.K.), and commercial products are available and
being purchased by a relatively low percentage of
organizations, the marked change in the threat has not to
date precipitated a signicant change in buying behavior
of clients, or in the kinds of cover available from terrorism
PGEs.
The primary drivers for the existence of
terrorism PGEs
When discussing their decisions with corporate clients,
two factors are the most common reasons for the
purchase of a terrorism insurance program. Either
the organization’s risk tolerance is such that they are
reluctant to not buy terrorism cover or, more frequently,
there is a requirement based on lending criteria to
demonstrate that an asset against which there is a
loan is nancially protected against all risks. It is less
common to nd organizations who are deeply invested
in understanding the nature of their terrorism exposures
and for whom risk transfer is a natural conclusion of
a broader risk management process. When terrorism
capacity was withdrawn globally after 9/11, and when the
same happened previously in London in 1993, the primary
impact of that withdrawal was to prevent commercial
property transactions. It was the stasis in the commercial
property markets that governments responded to in
creating the terrorism PGEs, not the absence of terrorism
cover itself.
Capacity is available in the non-terrorism markets to
cover the range of potential catastrophic losses, but the
challenge of eectively modeling terrorism continues
to stymie the provision of adequate reinsurance to
the commercial market to make the terrorism PGEs
redundant. This reluctance on the part of reinsurers to
provide capacity to commercial insurers has remained
unchanged, despite the changing nature of the risks
and improved ability to model some aspects of the risk.
While developments are in the pipeline for new modeling
techniques and the potential involvement of ILS capacity
in the terrorism market, the situation at present is that
only the terrorism PGEs are equipped to eectively
underpin the commercial property market.
When considering the specic types of terrorism hazard,
there is an argument that the commercial market could
perhaps oer enough capacity to deal with conventional
attacks, including large vehicle-borne improvised
explosive devices and the use of an aircraft as a kinetic
weapon. However, the existential terrorism risk, including
the use of weapons of mass destruction and the potential
for a malicious cyber event to generate major physical
damage, are beyond the market’s appetite.
It is our assessment that the primary driver for the
continued existence of the terrorism PGEs is the
enduring requirement for full insurance protection from
lenders in the commercial property market. This is
further reinforced by the reluctance from reinsurers to
provide capacity to commercial insurers for the most
catastrophic terrorism scenarios.
What might constitute a major loss?
Tragic events in Paris, London, Orlando and elsewhere in
the last ve years have provided signicant data on the
range of nancial losses following a marauding terrorist
rearms attack, or the use of a vehicle as a weapon.
Calculations by respected economic institutions suggest
that the economic losses run into billions. However,
the insurable losses from these events have been
negligible — particularly for the terrorism PGEs. More
analysis is required, but initial assessment indicates that
a comparatively small amount of the overall economic
loss lends itself to being captured as insurable. There are
certainly gaps in the provision of meaningful cover for
small and medium sized enterprises (SMEs) which can be
disproportionally impacted by relatively short periods of
business interruption and a reliance on a single location.
There are also improvements that could be made to
traditional cover to ensure that non-damage business
interruption is more routinely oered and taken up.
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On the current assessment of the more recent events,
primarily in Western Europe, it is dicult to see how — even
with product innovation and improved distribution — a macro
loss could be generated from a marauding terrorist rearms
attack or the use of a vehicle as a weapon.
In conventional terms, the use of a very large vehicle-borne
improvised explosive device, or an aircraft as a kinetic weapon
could certainly develop a major loss. However, advances in
assessment methodology have made these losses much
easier to calculate and their geographically concentrated
nature means that insurers should be able to manage their
aggregation risks through eective underwriting controls.
There is an argument that the commercial market is actually
well placed to take much of this conventional risk o
government balance sheets.
A catastrophic loss in the terrorism market is much more likely
to come from the use of a NCBR weapon, or a cyber event
generating major physical damage. The risk of a large-scale
contamination event and the potential for a remediation
solution to be complicated by political factors is particularly
concerning as the barriers to entry may be relatively low.
The diculty in determining the geographic impact of these
events means that commercial insurers struggle to create
eective underwriting controls. There is also a reasonable
perception among insurers that much of the information
required to determine the credible risks from a range of NCBR
and cyber threats sits in the domain of governments, which
are understandably unwilling to release that information to the
commercial insurance market.
Public/private partnership across terrorism
insurance
By considering the changing nature of the risk, the key
drivers for the continued existence of the terrorism
PGEs and by identifying what might constitute a major
loss, it becomes clear that benet will come from a more
coordinated approach between the commercial market and
terrorism PGEs.
The commercial market is best placed to envisage,
produce and distribute innovative solutions to respond
to the changing threat. With the backing of appropriate
reinsurance, the commercial market also has the potential
to take much more of the conventional risk o government
balance sheets. The bulk of economic loss from terrorism
events probably falls into the uninsurable space, but there
is an opportunity for much more of the risk to sit with the
stand-alone market.
For the potential existential risks posed by NCBR terrorism,
cyberterrorism and any as yet unseen macro attack
methodology, only the terrorism PGEs are capable of
providing the condence that the commercial property
market will be able to operate eectively in the immediate
aftermath of an event. Their role and function is therefore
unlikely to be replaced at any time in the near future by the
commercial insurers.
In order to ensure that an eective ecosystem of cover is
available to all clients, it may be necessary for the terrorism
PGEs to work more closely with commercial insurers on
distribution, modeling and product innovation. Increasing
the breadth and penetration of cover available in any
jurisdiction will inevitably increase national resilience and
ensure that businesses can recover quickly and eectively
from these heinous acts — something which demands
improved public and private sector coordination.
Terrorism risk temperature key
95
Extremely high
85 Very high
75
High
65 Medium-high
55
Signicant
45 Medium
35
Medium-low
25
Low
15 Very low
5
Extremely low
Risk ratings and temperatures, as of September 2018,
have been provided using analysis and ratings from
both Oxford Analytica and Alert:24 (in partnership
with AKE Intelligence).
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Schemes for terrorism
insurance in selected
countries
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Summary
Following the 9/11 terrorist attacks in the U.S., insurance cover for terrorism
risk in Australia was withdrawn by insurers, causing a large pool of assets to be
uninsured for terrorism risk. The Terrorism Insurance Act (“ATIA”) was passed
in 2003 to override terrorism exclusion clauses in eligible insurance contracts,
enabling coverage of eligible losses arising from a declared terrorist incident
(DTI). ARPC was established under this Act to administer Australia’s terrorism
reinsurance scheme, which covers eligible terrorism losses involving commercial
property, associated business interruption losses and public liability. In the event
of a DTI, holders of eligible insurance contracts will be covered with insurers
required to meet those claims in accordance with the other terms and conditions
of individual policies.
ARPC is a corporate Commonwealth entity within the Treasury portfolio. It is
currently governed by a Board with a chair and between four and six members
and a chief executive. Since its inception, ARPC has continued to modernize
to ensure its ability to full its purpose. In June 2004, ARPC had reinsurance
agreements with 187 insurers and more than AUD 55 million gross written
premium. By 2018, there are more than 230 insurers and AUD 170million gross
written premium.
Australia
Australian Reinsurance Pool Corporation (ARPC)
Terrorism risk
Low
Commonwealth guarantee
up to AUD 10bn
Retrocession program
AUD 3.065m
ARPC deductible
AUD 285m
Industry retention
AUD 100K to AUD 200m
Policyholder deductibles
Funding layers
Commonwealth guarantee: This guarantees the payment of money
that may become payable by ARPC. Requires Parliamentary approval
ifpayments will exceed AUD 10 billion.
Retrocession program: This section of funding is sourced from the
commercial reinsurance market. Mostly placed as multi-year deals.
ARPC capital: This is sourced from the sale of terrorism reinsurance.
Industry retention: This is the aggregate of the treaty retentions of all
insurers involved in a single event.
Scheme
Denition of terrorism
A terrorist act is dened in the Australian criminal
code as one that involves an action or threat made to
advance a political, religious or ideological cause. A
terrorist act requires the perpetrator/s to have intent to
coerce or inuence by intimidation the government of
the Commonwealth of Australia or of an Australian State
or Territory, or to intimidate the public, or a sector of
thepublic.
Scope of coverage
Eligible property includes commercial and industrial
buildings (including xtures and building contents) plus
associated business interruption. Commercially-owned
infrastructure, such as roads, tunnels, dams, pipelines and
sites covered by a construction policy, are also deemed
eligible property. Farms can obtain cover if they hold
insurance against business interruption. The scheme is
only focused on insured losses resulting from damage to
property and, therefore, it does not extend to life, personal
injury or workers compensation.
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Nuclear, chemical, biological and
radiological cover
Acts of terrorism involving chemical and biological
material are covered under the scheme. Nuclear and
radiological risks are not covered.
Summary of exclusions
Perils excluded: Nuclear risks, radiological risks, loss
associated with travel (including damage to personal
belongings, cancellation, sickness, injury or disease),
cybercrime.
Classes excluded: Residential property (excluding
high value mixed use buildings), Australian and State
government assets, marine insurance, motor insurance,
workers compensation insurance, professional indemnity
insurance, life insurance, aviation insurance, prime movers,
trailers, railway stock and tram stock, nancial products.
Additional information: Exclusions include contracts
of insurance underwritten by the Australian government
or providing cover to certain state infrastructure within
Australia, the scheme is focused on insured losses from
property damage and does not extend to life, personal
injury or workers compensation.
Territorial scope of scheme
Australian territory only.
Premium rates
Insurance rates for insured: Insureds are free to set
their own terrorism premiums for the underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance rates for members: Premium charges allow
for the accumulation of a pool used to fund all operations,
including retrocession premiums and payments to
government for the Commonwealth Guarantee, while
building a reserve available for future claims. Premiums
are calculated as a percentage of the insurer’s gross
written premium in accordance with the postcode of the
property being reinsured. Each postcode is assigned to
one of three Tiers A (16%), B (5.3%) or C (2.6%), having
regard to the population density in a postcode area.
Maximum scheme paid losses
A siege at the Lindt Café in Martin Place Sydney
on December 15, 2014 resulted in insured losses of
approximately AUD 4 million which were within the
insurer deductibles for the scheme.
Private reinsurance arrangements,
government guarantees and structure
The retrocession program currently stands at
approximately AUD 3 billion. ARPC’s pool of retained
earnings will meet claims until the agreed retrocession
deductible is reached, when claims will be funded by
the program. The retrocession program involves ARPC
purchasing reinsurance and comprises more than 60
participants from Australia, the U.K., Europe, Bermuda,
U.S. and Asia. All the participants on the program are
rated A- or better by Standard and Poor’s or AM Best.
For claims above the AUD 3 billion retrocession layer, the
Commonwealth provides a guarantee of AUD 10 billion. If
the amount paid or payable exceeds AUD 10 billion, the
minister must announce a reduction percentage, which
limits the level of cover by reducing the amount payable
by the insurer to the policy holder.
Compulsory or elective?
Insurance: It is compulsory for insurers with eligible
policies issued in Australia to provide cover in a declared
terrorism incident.
Reinsurance: It is elective for insurers to participate in
the ARPC scheme which transfers the insurers liability to
the pool.
Insurers operating in Australia can decide if they want to
obtain reinsurance coverage for terrorism from ARPC,
or carry the underwritten risk themselves, or obtain
coverage through a dierent mechanism. Almost all
commercial property insurers choose to reinsure their
risk with ARPC.
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Summary
Following 9/11, Austrian insurers in the VVO set up a mixed co- and reinsurance
pool (Österreichischer Versicherungspool zur Deckung von Terrorrisiken) on
September 24, 2002, starting by October 1, 2002. The VVO’s primary goal in
setting up the new pool was to grant aordable property cover against terrorism
exposure, i.e., covering risks arising from an insured peril triggered by terrorism.
The pool is open to insurers and reinsurers writing business in Austria, some
99% of primary insurance companies that are members of the VVO participate
in it, their share of the pool being prorated to their market share in property
insurance.
The Austrian pool represents the response of a relatively small advanced
insurance market (regarded before September 11 as facing a relatively low and
infrequent terrorist threat) which, even with optional terrorism insurance, would
otherwise face a degree of market failure. The Austrian government has decided
not to oer a third layer of cover, in the form of a state guarantee, for the time
being. The Austrian Ministry of Finance has made clear that it welcomes the
action taken by the insurance industry but wishes to avoid any steps that could
deter the private sector from taking measures itself to accommodate terrorism
risks as far as possible.
Terrorism risk
Extremely low
Denition of terrorism
No Austrian government declaration is required for an act
to be recognized as a “terrorist act” for the purpose of
the scheme. The Verband der Versicherungsunternehmen
Österreichs (VVO, the Austrian Insurance Association)
draws instead from the German denition developed by
the GDV: “terrorist acts are all acts of persons or groups of
persons with a view to achieving political, religious, ethnic,
ideological or similar goals, and which are apt to put the
public or sections of the public in fear, thereby inuencing a
government or public bodies.”
Scope of coverage
The scheme applies to physical damage and business
interruption (excluding contingent business interruption) for
industrial, commercial and private property, as per the local
property insurance policy. Indemnity is limited to EUR 5
million per policy each year and EUR 200 million across all
policies each year.
Austria
Österreichischer Terrorpool
Nuclear, chemical, biological and
radiological cover
Not covered.
Summary of exclusions
Perils excluded: Nuclear, chemical, biological and
radiological attacks.
Classes excluded: Business interruption (except in respect
of direct consequential damage), liability, marine, aviation
and transport, supply chain losses, art insurance, motor
third-party liability and personal accident losses.
Additional information: Given that the Austrian state is not
involved, all reinsurance and retrocession arrangements are
on a non-state basis.
Territorial scope of scheme
Austrian territory only.
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Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance rates for members: From 0.75% to 4%
of the sum insured for participants in the pool and from
2.25% to 12% of the sum insured for non-participants in
the pool.
Maximum scheme paid losses
In the period since its creation on October 1, 2002, the
Austrian pool has not had to face a serious test or a
single claim.
Private reinsurance arrangements,
government guarantees and structure
Given that the Austrian state is not involved in the
scheme, all retention and reinsurance arrangements
are on a non-state basis. The private insurance market
provides coverage structured in two layers:
First – market retention, up to an annual aggregate of
EUR 100 million, to be co-insured by direct insurers and
in proportion to their market share;
Second – a reinsurance layer of EUR 100 million,
up to a total annual aggregate of EUR 200 million,
underwritten by the international reinsurance market.
Compulsory or elective?
Insurance: Terrorism cover remains optional for
most lines and is oered on a private, facultative and
conditional basis. Exceptions are commercial passenger
and third-party liability for aviation, railways and other
“no fault” liability classes, where terrorism cover is
compulsory.
Reinsurance: Pool membership is optional, but
approximately 99% of VVO members (market share
property insurance) belong to the pool.
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Belgium
TRIP (Terrorism Reinsurance & Insurance Pool)
Denition of terrorism
An act or threatened act in secret for ideological, political,
ethnic or religious ends, performed individually or in groups
and intended as an attempt at the lives of individuals or to
either partially or completely destroy the economic value of
tangible or intangible property whether to have impact on
the public, create a climate of insecurity or put pressure on
the authorities in a bid to impede the running and normal
operation of a service or business.
Summary
Following the ratication of the Belgian Terrorism Act on April 1, 2007, TRIP was
created on February 1, 2008 to provide terrorism insurance and reinsurance
coverage. As of May 1, 2008, the terms of Belgian policyholders’ insurance
contracts have been adapted to reect the new legislation governing the way in
which insurers are required to deal with the impact of terrorist attacks.
While participation in the TRIP pool is not compulsory, more than 95% of
insurance companies are members of the scheme. Only members of the pool will
benet from the solidarity and compensation system introduced by TRIP, i.e. the
distribution (compensation) of the members’ contractual obligations in case of
acts of terrorism among all members of the pool.
Terrorism risk
Medium-low
Scope of coverage
The Terrorism Act ensures that compensation is given
to all insured persons who may suer damage as a
result of a terrorist attack and guarantees the stability
and sustainability of the insurance sector. It sets out a
comprehensive insurance solution to cover the damage
caused by terrorism, whereby the insurers themselves
continue to manage and settle the claims made by their
insured parties.
The system works on three levels: the insurers are the rst
to act, followed by reinsurers and nally the government.
Indemnity is limited to EUR 75 million per insured party
per year, regardless of the number of insurance contracts
purchased. The total annual cover for claims made on
the basis of terrorism acts is limited to EUR 1 billion. This
amount is indexed and equals EUR 1.251billion as of
January 1, 2018. This limitation is not applicable to workers’
compensation insurance, in which case the insurer must
fully indemnify the individuals harmed or their claimants.
However, insurers can recourse the excess loss to the
State workmen’s compensation fund (FEDRIS: “agence
fédérale des risques professionnels”).
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Nuclear, chemical, biological and
radiologicalcover
Coverage is provided for bacteriological and chemical
risks (including “dirty bombs”) and for damage caused
by weapons or devices that explode due to a change
in the structure of the atomic nucleus (i.e. damage by
nuclearbombs).
Summary of exclusions
Perils excluded: Damage to nuclear facilities, third-party
liability for nuclear energy, specic terrorism-insurance
policies.
Classes excluded: Nuclear facilities and energy, railway
rolling stock, aircraft, ships.
Additional information: Damage caused by nuclear
bombs are covered by the scheme but can be excluded
from the insurance coverage.
Territorial scope of scheme
The Terrorism Act concerns policyholders normally
residing in Belgium or (if the policyholder is a legal entity)
the premises of the legal entity to which the contract
applies, property located in Belgium, where the insurance
policy in question covers buildings or buildings and their
contents, vehicles registered in Belgium, contracts taken
out in Belgium, where a given contract lasts for less than
four months and covers risks incurred during a trip or
holiday (whatever the class in question).
Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance: Each pool member pays a contribution
to the overall TRIP budget (for private reinsurance
arrangements and management costs) which is
proportional to its TRIP market share.
Maximum scheme paid losses
Total cost of claims for 2016 is estimated at
EUR 113 million (2018 gures) from two terrorist attacks
in that year, rst at Maelbeek metro station in Brussels
and another at Brussels National Airport in Zaventem.
Private reinsurance arrangements,
government guarantees and structure
TRIP obtains reinsurance cover on behalf of all its
members from the professional reinsurance markets
(Continental, London and Bermuda) as part of a
three-layered program.
First – market retention, up to an annual aggregate of
EUR 300 million, to be co-insured by direct insurers;
Second – a reinsurance layer underwritten by the
international reinsurance market. This provides
indemnity as the dierence between EUR 600 million
(the rst and third layer) and the “indexed EUR 1 billion”
maximum scheme coverage. The reinsurance system
includes both annual renewable capacity placement
and multiyear (three years) capacity placements;
Third – EUR 300 million government surety in excess of
private market participation.
For example, as of January 1, 2018 with an indexed
maximum scheme coverage EUR 1.251 billion, a total
of EUR 651 million was provided as reinsurance in the
second layer, in excess of the EUR 300 million market
retained rst layer but before the EUR 300 million
government surety third layer.
Compulsory or elective?
Insurance: The Terrorism Act makes provision for
mandatory terrorism cover in so-called “mass” insurance
policies held by virtually all citizens, either as private
individuals or as employees, i.e., motor third-party
liability, re simple risks, strict liability for public places,
workmen’s compensation insurance, life assurance,
personal accident and health insurance.
Reinsurance: Participation in the TRIP scheme is elective
for insurers and reinsurers, but more than 95% of
insurers useTRIP.
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Summary
The government in Denmark decided in April 2005 that a committee should
evaluate the need for a terrorism insurance scheme. The committee assessed
the potential losses that Danish non-life insurance companies would suer if
nuclear, chemical, biological or radiological (NCBR) terrorist attacks occurred. It
also evaluated the possibility of buying reinsurance on NCBR terrorism from the
international reinsurance market, concluding that this proved very limited due
to the unpredictable nature of consequences and subsequent ambiguity when
pricing risks.
To remedy this market limitation, the Danish Terrorism Insurance Act was
adopted enabling the State to act as a reinsurer of NCBR risks. The scheme
only includes insurance policies which cover NCBR terrorism risks for buildings
and contents, including business interruption losses, as well as hull damages for
railway rolling stock, motor vehicles and for ships in Denmark.
Terrorism risk
Low
Denmark
TIPNLI (Danish Terrorism Insurance Pool for Non-Life Insurance)
Denition of terrorism
No Danish government declaration is required for an act
to be recognized as a “terrorist act” for the purpose of the
scheme. The Danish Terrorism Insurance Council decides
regarding an event arising from a terror attack — where
NCBR weapons are used — whether the damages are
covered by the Terrorism Insurance Scheme. To determine
if an event arises from NCBR terror, the Council can make
use of expert assistance.
Scope of coverage
The scheme consists of a national reinsurance guarantee
of maximum DKK 15 billion, which will be activated by
damages exceeding the retention of the members of the
scheme. The scheme implies that the government will make
payment to the Danish Terrorism Insurance Pool for Non-
Life Insurance (TIPNLI) in the case of NCBR-terror losses
in excess of the retention. The covered losses are dened
as NCBR-damages to buildings and contents, including
business interruption, and also extends to cover hull
damage to railway rolling stock, motor vehicles and ships
caused by NCBR terrorism.
Nuclear, chemical, biological and
radiologicalcover
NCBR terrorism is covered.
Summary of exclusions
Perils excluded: Non-NCBR perils.
Additional information: The Terrorism Insurance Council
decides whether an event arising from terror has been
subject to the use of NCBR weapons and thus whether the
damages are covered by the scheme.
Territorial scope of scheme
The insured property or interest must be situated in
Denmark when the event occurs for possible damages to
be covered by the scheme.
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Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance rates for members: The members of the
scheme must pay an annual risk premium to the state
for the reinsurance guarantee. This premium will depend
upon the NCBR insurer’s retention and is determined by
the Terrorism Insurance Council based on an evaluation
of the price and capacity available for NCBR coverage in
the reinsurance market and the solvency position of the
non-life insurance industry.
This is currently (2018) a tari of 0.10% on the state
guarantee amount (DKK 15 billion), equaling
DKK 15million.
Those holding a policy covering risks in the lines included
in the system (irrespective of whether they have NCBR
terrorism or not) must contribute to the repayment of
amounts paid from the state reinsurance guarantee.
Maximum scheme paid losses
No reported losses to date.
Private reinsurance arrangements,
government guarantees and structure
The scheme consists of two layers:
First – own risk retention for the non-life insurance
industry. This retention is determined by the Terrorism
Insurance Council based on an evaluation of the price
and capacity available for NCBR coverage in the
reinsurance market and the solvency position of the
non-life insurance industry, as of 2018 this is currently
DKK 19.1 billion;
Second – State guarantee (maximum of DKK 15 billion).
The second layer will only come into operation when
the own risk retention has been exceeded.
Compulsory or elective?
Insurance: Provision of terrorism insurance is not
compulsory in Denmark. Compulsory for Danish
registered insurance companies who write NCBR
terrorism insurance.
Reinsurance: Participation is elective for foreign
insurance companies operating in Denmark and writing
NCBR terrorism insurance.
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Summary
In the French insurance market, terrorism insurance cover is a mandatory
extension of all property policies without limitation or restrictions, as per the
Code des Assurances article L126-2. Following the 9/11 attack, (re)insurers
reinsurers considered that there should be a market solution to cover a major
property loss caused by a terrorist attack or series of attacks and due to the
potential size or aggregation of losses the state needed to provide a backstop
guarantee against major property damage or a series of losses caused by a
terrorist attack. GAREAT was built based on the format and experience of
existing terrorism schemes in Europe (Consorcio and Pool Re), with the state
providing an unlimited backstop, but with the distinctive feature of the maximal
use of private reinsurance to increase the limits covered by the market before
state intervention.
Terrorism risk
Signicant
France
GAREAT (Gestion de l’Assurance et de la Réassurance des Risques Attentats et Actes de Terrorisme)
Denition of terrorism
No French government declaration is required for an act
to be recognized as a “terrorist act” for the purpose of
the scheme, but provided an event meets the denition in
the French Criminal Code, all types of terrorism (regional,
national and international) in any form (including Nuclear,
chemical, biological and radiological risks) are covered for
all French property risks.
Above a certain loss level however, the agreement of the
State is needed.
Scope of coverage
The GAREAT scheme provides comprehensive cover
for damage to industrial, commercial and homeowner
properties and associated business interruption costs.
GAREAT’s cover follows the underlying property policy
in its scope and limit, and a discount for limitation of the
cover amount can be applied if the insured wants to take
the related risk. There are no exclusions for the types
of properties covered by the scheme and it includes all
nuclear plants’ coverage for terrorism (in other countries
these are often covered by a separate Nuclear Pool
or excluded). This scheme provides some of the most
comprehensive coverage in the world, as all forms of
attacks are covered to the full insured value of each
policy. The scheme also covers physical damage caused
by an act of cyberterrorism.
Nuclear, chemical, biological and
radiologicalcover
On January 23, 2006, the law amended the French Code
des Assurances making NCBR mandatory. Property policies
must cover damage caused by the use of nuclear, chemical,
biological and radiological devices.
Summary of exclusions
Classes excluded: Transport, aviation hull and marine
hull above EUR 1 million personal accident, life, third party
liability.
Additional information: No exclusion by type of property
risks. For the main exclusions, see CCR.
Territorial scope of scheme
Property damage and consequential losses arising from an
act of terrorism sustained on French territory are covered,
even when the cause originates outside France.
Unlimited via CCR
2018:
EUR 2.1bn xs EUR 500m
Market retention: EUR 500m
Retention
150m
80m
50m
20 20
Retention: EUR 65m xs EUR 380m
2017:
EUR 335m xs € 45m
Large risks
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Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance rates for members: A reinsurance rate is
charged by GAREAT on the property policies; premium,
varying dependent on the amount of the sums insured.
Private and public reinsurance accounts for less than half
of the premium charged. Net premiums after reinsurance,
losses and own costs, are not held in reserve but instead
returned to insurers by GAREAT.
Maximum scheme paid losses
Since its inception, GAREAT has not had any major
property losses. However, there have been several small
scale losses among its portfolio of small and medium
sized risks, mostly from regional or national terrorism
acts. Overall these represent around 1% of the total
aggregate premium. The recent, tragic attacks in Paris
and Nice, which caused signicant injury and loss of life,
were covered by the special public entity FGTI, which is
funded by charges levied on property policies. GAREAT is
only called upon when there is a property loss.
Small/medium risks
Private reinsurance arrangements,
government guarantees and structure
Unlike some other schemes, GAREAT does not hold
reserves against future losses or create a buer to
distance the state from risk. Instead, all reserves are set
aside individually and on a voluntary basis by insurers,
reinsurers and CCR. GAREAT runs two schemes - a large
risks scheme for policies with sums insured/loss limits
over EUR 20 million and a small/medium risks scheme
for all other policies. Both schemes include reinsurance
cover from international reinsurance markets as part of a
multi-layered program:
First – market retention, up to an annual aggregate of
EUR 500 million, to be co-insured by direct insurers;
Second – a EUR 2.1 billion reinsurance layer
underwritten by the international reinsurance market in
excess of the market retention;
Third – unlimited government surety in excess of
private market participation through CCR. Losses
which do not fall within the scope of the risks covered
by CCR fall back to the pool (please see CCR below).
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Denition of terrorism
As per GAREAT.
France
(continued)
CCR (Caisse Centrale de Réassurance)
Summary
Established in 1946, CCR is the reinsurance company of the French State and
provides unlimited cover to GAREAT. CCR completes the state-backed scheme
GAREAT by providing its large risks section with unlimited state-guaranteed
cover above its limit of EUR 26 billion. This cover only concerns risks in the
scope of the compulsory cover. Risks and insurance covered by GAREAT’s
large risks section outside this scope are not included under this cover. This
arrangement gives GAREAT large risks’ members access to some of the
broadest covers in the world.
The small/medium risk scheme is in four layers:
First – market retention, up to an annual aggregate of
EUR 45 million, mutualized between direct insurers in
proportion to their market share;
Second - a EUR 355 million reinsurance layer
underwritten by the international reinsurance market in
excess of the market retention;
Third – further market retention, up to an annual
aggregate of EUR 56.12 million excess of the underlying
EUR 400 million, paid by the members in proportion to
their share of the losses;
Fourth – unlimited government surety in excess of private
market participation through CCR.
Compulsory or elective?
Insurance: Since 1986, terrorism coverage cannot be
excluded from policies covering direct property loss and
business interruption, so terrorism is included automatically
on all such policies, but a discount for limitation of the cover
amount can be applied if the insured wants to take the
related risk.
Reinsurance: Compulsory and elective - all insurers located
in France and participating in the insurance association
(FFA) must cede all property risks located in France, and
valued above EUR 20 million sum insured (for large risks),
to GAREAT. This limits any kind of anti-selection. As a
result, around 95% of large risks in France are ceded to the
scheme. Only around 14% of small and medium-sized risks
are ceded, as there are alternative solutions in the market,
insurers may include these in their reinsurance covers.
Scope of coverage
Compulsory coverage includes policies covering property
re damage located on national territory, motor insurance
policies, aircraft hull insurance policies (aircraft used for
non-commercial or non-prot purposes, with a value of
less than EUR 1 million) and vessel hull insurance policies
(marine, lake and inland waterway vessels used for pleasure
boating, with a value of less than
EUR 1 million). Compensable losses covered are direct
material damage, nancial losses resulting from direct
material damage, costs related to property decontamination
(excluding decontamination and containment of debris) and
business interruption covered by the policy as a result of
material damage.
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Nuclear, chemical, biological and
radiologicalcover
Covered under CCR’s operational model that evaluates
its risk exposure, that of its clients and that of the
FrenchState.
Summary of exclusions
Perils excluded: Losses and damage caused by foreign
and civil wars, strikes, riots, public unrest, malicious
acts, vandalism or villainous acts, theft, looting or fraud
subsequent to an attack or act of terrorism.
Classes excluded: Policies underwritten in the
construction liability line; aircraft hull insurance (less than
EUR 1 million and/or used for commercial purposes),
vessel hull insurance for marine, lake and inland
waterway vessels (less than EUR 1 million and/or not
used for pleasure boating), cargo and railway rolling
stock insurance, nancial loss or business interruption
not resulting from covered material damage, business
interruption “caused by risks located abroad,” terrorism
insurance policies covered by a specic GAREAT
agreement, bodily injury, business interruption losses
abroad, business interruption losses non-consecutive
to direct property damage sustained in France or
non-consecutive to damage covered, non-consecutive
consequential loss.
Territorial scope of scheme
Coverage as per GAREAT, but CCR does not extend to
losses sustained in French Polynesia, French Southern
and Antarctic Territories and New Caledonia.
Premium rates
All calculated and payable under GAREAT.
Maximum scheme paid losses
Thus far, no act of terrorism has caused damages
requiring CCR’s cover to be called into play, either in
terms of large risks or small and medium risks.
Private reinsurance arrangements,
government guarantees and structure
CCR is authorized by the French Insurance Code to
provide unlimited state-guaranteed reinsurance solely for
losses falling within the scope of the compulsory cover
provided for in said code.
Compulsory or elective?
Insurance: As per GAREAT.
Reinsurance: Automatically provides unlimited
reinsurance protection to GAREAT.
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Summary
After the 9/11 attacks, the reinsurance market decided to exclude losses due
to an act of terrorism. The primary market followed suit in view of the missing
reinsurance capacity. Under the leadership of the German Insurance Association
(GDV), a uniform denition of terrorism was developed, and a solution was
agreed to form a specialist insurer for writing terrorism cover. 17 insurers
and reinsurers founded EXTREMUS in September 2002 after obtaining the
Government’s agreement to back this format. The company acts as a primary
insurer, issuing the policies on its own paper. EXTREMUS buys reinsurance from
its shareholders, from other companies active in the German market and from
international reinsurers.
Terrorism risk
Low
Denition of terrorism
A terrorist act is dened as any act/acts committed by
persons or groups of persons to achieve political, religious,
ethnic or ideological purposes that are likely to spread
anxiety or fear among the population or parts of the
population and thereby inuence any government or
government institution.
Scope of coverage
EXTREMUS covers commercial and industrial property,
including business interruption for risks/policies exceeding
EUR 25 million. Indemnity is limited to EUR 1.5 billion per
contract/client and EUR 10 billion across all policies each
year. Losses due to suppliers/customers contingency
losses, business interruption losses due to failure of
external supply services/utilities and access restrictions
are materially sublimited.
Germany
Extremus
Nuclear, chemical, biological and
radiologicalcover
Not covered.
Summary of exclusions
Perils excluded: Nuclear, chemical, biological and
radiological.
Classes excluded: Aviation, marine, life, personal accident.
Additional information: Cyber losses are not explicitly
covered and furthermore EXTREMUS has an exclusion
clause in terms of data loss. However, in the case of a
property damage due to a cyberattack, some losses would
be recognizable.
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Territorial scope of scheme
All property must be located in Germany, and losses
have to occur on German territory. However, some
interdependent and contingent business interruption
losses do extend to losses in the European Union,
Iceland, Liechtenstein, Norway and Switzerland.
Premium rates
Dierentiated by risk class and location.
Maximum scheme paid losses
Thus far, no indemnications have been paid out by
EXTREMUS under the main program. The severe
terrorism attack on December 19, 2016 in Berlin did aect
one insured, but the loss remained within the deductible.
Private reinsurance arrangements,
government guarantees and structure
The private insurance market retains the rst
EUR 2.5 billion (including reinsurance from the private
reinsurance market) along with all risks/policies under
EUR 25 million. The government then provides up to a
EUR 7.5 billion guarantee in excess of this retention.
Compulsory or elective?
Insurance: Elective.
Reinsurance: Elective - any market is free to oer
terrorism insurance cover without cession to the pool.
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Summary
In response to the 9/11 terrorist attacks and the subsequent withdrawal of
terrorism cover by international reinsurers, Indian non-life insurers set up the
initiative for a reinsurance pool, and the Indian Market Terrorism Risk Insurance
Pool (IMTRIP) was created in 2002. Members of the pool are responsible for
reinsuring the entirety of terrorism risk on property insurance policies written by
all companies. All non-life insurance companies in India are members of IMTRIP,
who split shares and premiums based on the capacity they can provide. The
state has no direct involvement, so funding is premium reliant.
Terrorism risk
Medium-high
India
Indian Market Terrorism Risk Insurance Pool (IMTRIP)
Denition of terrorism
Terrorism is “an act or series of acts, including but not
limited to the use of force or violence and/or the threat
thereof, of any person or group(s) of persons, whether
acting alone or on behalf of or in connection with any
organization(s) or government(s), or unlawful associations,
recognized under Unlawful Activities (Prevention)
Amendment Act 2008 or any other related and applicable
national or state legislation formulated to combat unlawful
and terrorist activities in the nation for the time being
in force, committed for political, religious, ideological or
similar purposes including the intention to inuence any
government and/or to put the public or any section of the
public in fear for such purposes.
Scope of coverage
IMTRIP oers cover for business interruption and property
damage for re insurance, industrial all risks insurance,
re section of package insurance policies, re/engineering
sections of miscellaneous policies, property section of
cellular network policies, property section of engineering
insurances including erection all risks insurance (EAR),
marine-cum-erection (MCE), storage-cum-erection (SCE),
contractor’s all risks insurance (CAR), contractor’s plant
and machinery insurance (CPM), electronic equipment
insurance (EEI), civil engineering completed risks (CECR),
jeweler’s block policies (Sec. I and Sec. IV), on-shore assets
of port package policies, on-shore assets of o-shore
package policies, stock oater policies, on-shore drilling rig
equipment, advanced loss of prot cover in conjunction with
CAR/EAR, any other class specically agreed on by the
pool underwriting committee. Indemnity is limited to INR 20
billion per risk/location.
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Nuclear, chemical, biological and
radiologicalcover
Not covered.
Summary of exclusions
Perils excluded: Loss by seizure or legal or illegal
occupation; voluntary abandonment or vacation, loss
or damage caused by conscation, commandeering,
nationalization, requisition, detention, embargo,
quarantine or result of any public or government authority
order, pollutants or contaminants, nuclear, chemical,
biological and radiological cover, riots, cyberattack, hoax,
theft.
Classes excluded: Non-property risks in re and
engineering, and miscellaneous policies, consequential loss.
Territorial scope of scheme
Indian territory only.
A
B
C
A
B
C
P
O
O
L
M
A
N
A
G
E
R
I
N
S
U
R
E
R
S
R
E
I
N
S
U
R
E
R
S
Premium rates
Fixed rates are decided by a Pool Underwriting
Committee and dierentiated by risk class and location.
Maximum scheme paid losses
The Mumbai terrorist attacks on November 26, 2008
resulted in total claims of INR 3,765 million settled
byIMTRIP.
Private reinsurance arrangements,
government guarantees and structure
Excess of loss reinsurance (currently INR 36 billion in
excess of INR 4 billion) is placed with pool members and
overseas reinsurers.
Compulsory or elective?
Insurance: Provision of terrorism insurance is not
compulsory in India.
Reinsurance: Cession of all terrorism risks by Indian
insurance companies to the pool is compulsory.
Mutualization of risk - terrorism risks insured
by any of the Members is reinsured by all
other members in agreed proportions.
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Summary
Originally established in 1941 to provide compensation for losses caused by
war damage, the Property Tax and Compensation Fund Law was extended to
include property damage resulting from hostile action (with terrorism included).
Compensation is paid by the state at a percentage of the purchase tax
collections allocated to the fund each year (in 2013 the rate was xed at 15%)
and by the insurance industry.
Terrorism risk
Medium-high
Denition of terrorism
As dened by the Israeli Supreme Court, damage from a
hostile act is the “damage to property that is designed to
deliberately harm the state of Israel and is motivated by
hatred, hostility, vengeance etc. Hostile action includes
terrorism against Israel — actions with intent to intimidate
or coerce the civilian population, in furtherance of political
or social objectives.”
Israel
The Victims of Hostile Actions (Pensions) Law and The Property Tax and
Compensation Fund Law
Scope of coverage
Unlimited cover for direct damage to property (other than
household contents)
EUR 20,000 cover for direct damage to household
contents (excluding jewelry, art and antiques)
Additional coverage purchasable, costing 0.3% of the
property value (up to EUR 140,000)
Insurance cover is not limited for incorporated businesses
and includes cover for indirect damage (including
business interruption cover).
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Nuclear, chemical, biological and
radiologicalcover
Covered.
Summary of exclusions
Excluded classes: No cover for damage to: state-
budgeted bodies, health corporations, government
corporations, health maintenance organizations, higher
education facilities, public institutions or non-prot
organizations.
Territorial scope of scheme
Damage outside of Israel is included, such as aircraft
and ships. Property damage cover can be purchased for
outside of Israel for 0.5-4.5% of its value.
Premium rates
The Israeli government collects taxation to help facilitate
compensation and uses this in distributions made under
the Property Tax Compensation Fund.
Additional household content coverage is purchasable,
costing 0.3% of the property value (up to EUR 140,000).
Property damage cover can be purchased for outside of
Israel for 0.5-4.5% of its value.
Maximum scheme paid losses
The result of 1,500 rockets targeting civilian areas in
November 2012 led to claims amounting at
EUR 20 million for direct damage and EUR 100 million
for indirect damage. Compensation was given for those
communities within 40km of the border with the Gaza
Strip.
Compulsory or elective?
A certain amount of coverage is guaranteed for all Israeli
residents. Additional household contents coverage may
be electively purchased for amounts above the threshold
amounts.
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Summary
The Dutch Terrorism Reinsurance Pool was established after the 9/11 attacks
when individual insurers were no longer prepared to provide cover for damage
caused by acts of terrorism. The Dutch government and the Dutch insurance
industry believed that the development of a government-backed terrorist
insurance scheme was necessary. The Dutch Terrorism Reinsurance Pool (NHT)
was therefore founded in July 2003.
Terrorism risk
Low
Denition of terrorism
Any violent act and/or conduct (committed outside the
scope of one of the six forms of acts of war as referred
to in 3:38 of the Financial Supervision Act) in the form of
an attack or a series of attacks connected in time and
intention as a result whereof injury and/or impairment of
health, whether resulting in death or nor, and/or loss of
or damage to property arises or any economic interest
is otherwise impaired, in which case it is likely that said
attack or series — whether or not in any organizational
context — has been planned and/or carried out with a view
to eect certain political and/or religious and/or ideological
purposes.
Scope of coverage
The NHT provides reinsurance coverage for terrorism,
malevolent contamination or precautionary measures
or any conduct in preparation for terrorism. Members
include insurance and reinsurance companies (life, non-
life, property, automobile, liability and health insurers),
while international reinsurance companies and the
Dutch government provide reinsurance. Insurers remain
responsible for contact with the insured and handling of
claims, but each member must implement the “NHT clause”
in the policy wording, which makes the terrorism cover and
wording identical for all members. Indemnity is limited to
EUR 75 million per policyholder/location each year and EUR
1 billion across all policies each year.
Netherlands
Nederlandse Herverzekeringsmaatschappij voor Terrorismeschaden N.V. (NHT – DutchTerrorism
Reinsurance Pool)
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Nuclear, chemical, biological and
radiologicalcover
Covered.
Summary of exclusions
Classes excluded: Aviation hull, aircraft liability, nuclear
risks and specic insurances which cover terrorism as a
named peril, other than the terrorism clause.
Territorial scope of scheme
Limited to Dutch insured risks: the insured’s real estate
is situated in the Netherlands, the insured’s vehicle or
vessel is registered in the Netherlands, the insurance
on a holiday or trip is underwritten by an insurer in the
Netherlands and purchased by a Dutch resident.
For all other categories, the insurance has to be
purchased by a Dutch resident.
Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements.
Reinsurance rates for members: On an annual basis, the
members pay their share of the reinsurance premium and
the operational cost of the NHT. The individual share is a
proportional gure of the market share (gross premium
income) of a member company.
Maximum scheme paid losses
No reported losses to date.
Private reinsurance arrangements,
government guarantees and structure
The EUR 1 billion aggregate limit includes reinsurance
cover from international reinsurance markets as part of
a three-layered program:
First – market retention, up to an annual aggregate of
EUR 200 million, to be co-insured by direct insurers;
Second – a EUR 750 million reinsurance layer
underwritten by the international reinsurance market
in excess of the market retention;
Third – EUR 50 million government surety in excess of
private market participation.
Compulsory or elective?
Insurance: Elective.
Reinsurance: Elective, however 95% of all insurance
companies in the Netherlands are members. Those
insurers who are members do, however, have to agree
that the Pool decides if an event meets the denition of
terrorism and decides about payment to the member
companies in case of losses due to terrorism.
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Summary
The increase in the number of terrorist attacks at the end of the twentieth
century and beginning of the twenty rst century highlighted the need to
provide reliable insurance protection against terrorism risks. Individual insurance
companies do not always have sucient nancial resources to provide insurance
for large industrial, transport and other businesses from the risk of terrorism.
To provide cover, they need strong reinsurance protection and the support of
other participants in the insurance market. To meet the growing demand for
reinsurance capacity, Russian insurers pooled their resources. The Russian
Antiterrorism Insurance Pool (RATIP) was therefore established on December
20, 2001 by Russia’s six leading insurance companies.
Denition of terrorism
Terrorism is the perpetration of an explosion, arson or any
other action (or threat of action) endangering the lives of
people, causing sizeable property damage or entailing other
socially dangerous consequences, if these actions have
been committed for the purpose of violating public security,
frightening the population or exerting inuence on decision-
making by government.
Russia
RATIP (Russian Antiterrorism Insurance Pool)
Terrorism risk
Medium-high
Scope of coverage
RATIP acts as an independent Russian reinsurer against the
risks of terrorism, sabotage, strike, riot and civil commotions
(SRCC) and Political Violence. These risks covered relate to
property insurance contracts, including construction risks.
Risks eligible for coverage (irrespective of whether they
were taken on the basis of contracts of direct insurance,
coinsurance or incoming facultative reinsurance) are
property insurance of legal entities against re and other
perils, machinery breakdown, insurance of electronic
devices, insurance of construction risks, insurance losses
from business interruption (only in addition to property
coverage), cargo insurance, insurance of railway vehicles,
car insurance (owned by legal entities), property insurance
for individuals (excluding insurance of motor vehicles
owned by individuals) and third-party liability, with a total
capacity of USD 240 million.
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Nuclear, chemical, biological and
radiologicalcover
Not covered.
Summary of exclusions
Perils excluded: Chemical, biological, biochemical,
nuclear or radioactive exposures, exposure to asbestos
of any type, mysterious disappearance or unexplained
loss, eects of mold, fungi and spores or other
microorganisms, cyberattack.
Classes excluded: Property section exclusions are
airplanes or any other aerial device or vessel; any ship or
riverboat, animals, plants and living creatures of all kinds.
Territorial scope of scheme
RATIP covers risks located in Russia, former Soviet Union
countries and overseas risks with Russian interests.
Premium rates
Dierentiated by risk class and location.
Maximum scheme paid losses
Since its foundation, RATIP has paid seven claims, most
of which were related to Russian embassies in Syria,
Afghanistan and Indonesia. RATIP’s loss ratio since its
launch is 5.2%.
Private reinsurance arrangements,
government guarantees and structure
The USD 240 million capacity includes reinsurance cover
from international reinsurance markets as part of a
two-layered program:
First – market retention, up to an annual aggregate of
USD 20 million, to be co-insured by direct insurers;
Second – a USD 220 million reinsurance layer
underwritten by the Lloyd’s markets in excess of the
market retention.
Compulsory or elective?
Insurance: Elective.
Reinsurance: Membership in the pool is elective, but
reinsurance of terrorism risks is compulsory for all
members of RATIP.
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Summary
Sasria was formed in 1979 after the increase in protests following the 1976
Soweto uprisings. During the period, the insurance industry decided it could
no longer underwrite losses arising from politically motivated acts of civil
disobedience. Since there was no insurance covering assets against strikes and
riots available in the private sector, the South African government and the South
African Insurance Association decided to form a short-term insurance company
focusing on political risk. The scheme’s mandate was extended in 1998 to cover
non-political perils such as strikes, labor disturbances and terrorism. Sasria was
also converted form a non-prot organization to public insurance company.
Denition of terrorism
No clear denition of terrorism is included within Sasria
but, as evidenced in Sasria vs. Elwyn Investments (Pty)
Ltd (relating to there being no clear denition of riot within
Sasria), it may ultimately come to the courts to decide.
Sasria does however include the following denitions:
i) any act (whether on behalf of any organization, body
or person, or group of persons) calculated or directed
to overthrow or inuence any State or government, or
any provincial, local or tribal authority with force, or by
means of fear, terrorism or violence;
ii) any act which is calculated or directed to bring about
loss or damage in order to further any political aim,
objective or cause, or to bring about any social or
economic change, or in protest against any State or
government, or any provincial, local or tribal authority,
or for the purpose of inspiring fear in the public, or any
section thereof;
However, in the cover Nuclear, chemical and biological
exclusion, terrorism is dened as follows and so this
denition might ultimately be used for the coverage
determination:
South Africa
South African Special Risk Insurance Association – SASRIA SOC LTD
Sasria SOC Ltd
The only short-term insurer in
South Africa the provides cover
against special risks
Intermediaries (Brokers)
Provide product advice
to the end-customer
End-user
Purchase short-term insurance
through brokers or directly
from the NMIs and adds Sasria's
special risk cover to their policy
All short-term insurers sell Sasria
special risk cover on behalf of
Sasria SOC Limited
Non-Mandated
Intermediaries (NMIs)
Special risk claim
verified and paid
out to end-user
Claim
Claim
Special
Risk Claim
Terrorism risk
Low
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For the purpose of this exclusion an act of terrorism
means an act, including but not limited to the use of
force or violence and/or the threat thereof, of any
person or group(s) of persons, whether acting alone or
on behalf of or in connection with any organization(s)
or government(s), committed for political, religious,
ideological or personal purposes or reasons including
the intention to inuence any government and /or to put
the public, or any section of the public in fear.
Scope of coverage
Sasria provides cover for personal and commercial
property: material damage, business interruption, money,
goods in transit, and motor and construction risk. Sasria
sells insurance cover through all registered insurance
companies which act as agencies. Its cover is sold as
an add-on to existing insurance policies. In essence, this
means that all day-to-day administration and collection
of premiums is undertaken by insurance companies, and
Sasria only ever comes into direct contact with a client
in the event of the settlement of a claim. Indemnity is
limited to ZAR 500 million any one insured each year,
but can also oer an optional excess of loss Wrap
Coupon of up to ZAR 1 billion.
Nuclear, chemical, biological and
radiologicalcover
Not covered.
Summary of exclusions
Perils excluded: Nuclear, chemical, biological and
radiological.
Classes excluded: Life, personal injury.
Territorial scope of scheme
South African territory only.
Premium Rates
Insurance: Rates are applied as a percentage of insured
value and vary according to the risk as per below:
Domestic risks — 0.003%
Commercial risks — 0.0120%
Business interruption — 0.021%
True commercial — 0.0528%
Reinsurance: Insurers act as Non-Mandated
Intermediaries who underwrite and collect premium
on behalf of Sasria. Insurance premiums must be paid
to Sasria within 30 days from the end of the month in
which Sasria cover commences, however insurers are
entitled to retain a processing fee up to 27.5% of the
premium.
Maximum scheme paid losses
The incurred claims for the 2016 and 2017 nancial
years amounted to ZAR 587 million and ZAR 767 million
respectively.
Private reinsurance arrangements,
government guarantees and structure
Sasria is protected by a catastrophe reinsurance treaty
underwritten by the global reinsurance market against
event losses in excess of company retention. With
regard to wrap cover policies, it retains only 20% of
risk, and the remaining risk is reinsured to the global
reinsurance market. In addition, there is a government
guarantee of ZAR 1 billion.
Compulsory or elective?
Insurance: Elective, but if terrorism cover is purchased,
it must rst be from Sasria.
Reinsurance: Sasria is a specialist insurer for which a
coupon attaches to an insurance policy. Therefore, it is
eectively compulsory to be attached by the insurer to
any policy where terrorism is purchased.
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Private insurer
CCS
Compulsory surcharge
Collected along with the premium Transferred to the CCS on a monthly basis
INSURANCE POLICY
Private insurance
company
issued by
Coverage clause compulsorily
included in the policy
EXTRAORDINARY RISKS
(terrorism, flooding, severe wind storms,
earthquakes, etc.)
Premium
(free premium rate)
ORDINARY RISKS
(life, accidents, fire, theft, etc.)
2 insurance contracts in the same policy
Summary
Consorcio de Compensación de Seguros (CCS) is not a pool, but a state-
owned enterprise that performs several functions in service of the Spanish
insurance sector. Probably its most important function is its management of
the Extraordinary Risks Insurance Scheme, which comprises natural (ood,
windstorm, earthquake, tsunami, etc.) and man-made risks, terrorism being
included in the latter. This is a public-private partnership insurance solution
dened by law, for which CCS provides coverage whenever these risks are not
covered directly and explicitly by the private insurer.
Terrorism risk
Very low
Spain
Consorcio de Compensación de Seguros (CCS)
Denition of terrorism
The Spanish Criminal Code (article 573 of 1995, modied
in March 2015) denes terrorism according to the objective
of the attack, and not by the way of performing it. The
aims that classify an oense as terrorism are: to subvert
the Constitutional order or severely de-stabilise public
institutions or economic structures, severely alter public
tranquility, severely de-stabilise the functioning of an
international organization or provoke a state of terror in the
people or a part of it.
Scope of coverage
In Spain, it is compulsory to extend the cover of
extraordinary risks for most insurance lines of property
(residential, commercial, industry, civil works, and motor
and railway vehicles), life, personal accidents and business
interruption. In the event that these extraordinary risks
(totally or partly) are not covered by the original issuer of
the policy, CCS would automatically cover the damages
for the same amounts and conditions in the original policy,
provided that none of these risks are expressly assumed
by the insurer issuing the base policy. Therefore, policies
in these areas are in practice dual: one standard policy
issued by the commercial (private) insurer and another one
for which CCS covers the extraordinary risks (terrorism
included).
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Nuclear, chemical, biological and
radiologicalcover
Spanish law does not make distinctions among the ways
of performing a terrorist attack, and the law regulating
the extraordinary risks insurance scheme species
that terrorism is covered. These both imply that NCBR
terrorist attacks would be covered by CCS in the same
way as other means of terrorism.
Summary of exclusions
Perils excluded: In principle, no terrorist perils are
excluded.
Classes excluded: Third-party liability, transport,
construction, aircraft, marine, agricultural, travel
insurance.
Additional information: Consequential/contingent losses,
other than direct business interruption, are not covered
- specically, those losses incurred as a result of the
disruption or cutting o of the external supply of electrical
power. Also, business interruption is not covered if there is
no material damage in the event as a whole.
Territorial scope of scheme
CCS coverage of the extraordinary risks, including
terrorism, are the same for all of Spanish territories.
Additionally, CCS coverage is extended to the personal
injuries of Spanish (national or resident) policyholders
abroad meaning that all Spanish life and/or accident
policyholders have their personal injuries covered as a
result of terrorist attacks anywhere in the world.
Premium rates
Insurance rates for insureds: There is a at rate to
extend the cover for extraordinary risks, reected in a
surcharge payable by the policyholder when purchasing
an in scope policy. This surcharge is calculated
considering risks and claim rates globally with taris
depending on the line of insurance and on the type of
exposure, applied against the sum insured (except for
motor). Current rates include:
Property loss: Residential, 0.07‰; oces, 0.12‰;
other commercial and industrial risks, 0.18‰. Up to 30%
discount available for sums insured in excess of
EUR 600 million, varying by exposure. Public works varies
from 0.28‰ to 1.63‰ depending on exposure type.
Motor: Flat Rate. Cars - EUR 2.10; Motorcycles - EUR 1.20
Lorries - EUR 9; Industrial vehicles - EUR 10.50; varies
from EUR 0.30 to EUR 26.60 for other vehicle types.
Personal injury: Life and general accident cover –
0.003‰; Travel (whilst in transit, excluding the duration
of a stay) – 0.00025‰.
Business interruption: Housing – 0.0035‰; other –
0.18‰.
Reinsurance rates for members: The above premiums
are transferred on a monthly basis by the insurance
companies to CCS, after retention of 5% for handling
costs.
Maximum scheme paid losses
At current prices, CCS’s most expensive losses from
terrorism events were an ETA (the terrorist organization
Euskadi Ta Askatasuna) attack on a telephone exchange
building in 1982 (EUR 55 million), an ETA attack on a
multi-storey car park at Madrid Airport in 2006 (EUR
49/50 million) and the Madrid train bombings, of jihadi
origin, in 2004 (EUR 50 million, mostly personal injury).
Around 6% of all claims paid by CCS have been due to
terrorism.
Private reinsurance arrangements,
government guarantees and structure
The current level of the equalization reserve for
extraordinary risks is deemed high enough, so no
reinsurance arrangement is in place or foreseen. There is
a state guarantee in case losses exceed CCS capacity.
However, this state guarantee has never been invoked in
the scheme’s existence, and there is no legal impediment
for CCS to be reinsured.
Compulsory or elective?
Insurance: Compulsory. The extension of the cover in
the said policy lines to cover the extraordinary risks, and
therefore terrorism, is compulsory. Insurance itself is not
(with the exception of motor vehicle insurance).
Reinsurance: CCS is a specialist Extraordinary Risk
Scheme which attaches to an insurance policy. Therefore,
it is eectively compulsory to be attached to any covered
policy line by the insurer.
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Summary
Pool Re was established in 1993 in response to an insurance market failure
triggered by the terrorist bombing of London’s Baltic Exchange. The actual
and prospective costs of the Provisional IRA’s mainland bombing campaign
in the 1990s led reinsurers to withdraw cover for terrorism-related damage,
which compelled insurers to follow suit. Pool Re was founded by the insurance
industry in cooperation with, and funding from, Her Majesty’s Treasury, to create
a private-sector solution in support of a public policy objective. The scheme is
owned by its members but is underpinned by an HM Treasury commitment to
support Pool Re if ever it has insucient funds to pay a legitimate claim.
Terrorism risk
Low
United Kingdom
Pool Re
Denition of terrorism
Acts of persons acting on behalf of, or in connection with,
any organization which carries out activities directed
toward the overthrowing or inuencing, by force or violence,
of Her Majesty’s government in the United Kingdom or any
other government de jure or de facto.
Scope of coverage
Pool Re’s primary role is to enable the U.K. commercial
market to underwrite the threat of terrorism to commercial
property at relatively risk-reective rates, by mitigating their
exposure to the catastrophic losses associated with major
attacks. The scheme provides comprehensive cover for
damage to commercial property and associated business
interruption costs. Most types of commercial property
are covered: buildings, their contents, site property,
construction projects, and plant and machinery. The
scheme does not protect private property, although it can
cover residential property insured by a business.
Nuclear, chemical, biological and
HMT drawdown
HMT Hypothecated Fund
Market retention
Pool Re investment fund
Commercial retrocession
Pool Re investment fund
Unlimited
GBP 700m
GBP 6bn
GBP 2.1bn
GBP 500m
GBP 250m
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radiologicalcover
Covered since 2003.
Summary of exclusions
Perils excluded: War.
Limited cover for: computer hacking, virus and denial of
service attack (property damage required).
Classes excluded: Marine, aviation or transit policies,
motor (auto) policies, reinsurance business, general
liability life or personal injury insurance.
Additional information: The scheme does not cover
damage to nuclear installations or reactors as this fall
within the remit of a separate scheme (Pool Re Nuclear).
Territorial scope of scheme
Only covers risks located in England, Scotland or Wales.
Excludes Northern Ireland, the Isle of Man and the
Channel Islands.
Premium rates
Insurance rates for insureds: Insurers are free to
set their own terrorism premiums for their underlying
policies to insurance buyers, according to normal
commercial arrangements.
Reinsurance rates for members: Premiums are paid
to members by policyholders, and members must remit
the corresponding reinsurance premium to Pool Re
within one month of the close of the quarter in which
those terrorism risks had attached. No reinsurance
commission is paid to members by Pool Re. However,
members decide to pay whatever intermediary
commission they may determine.
Reinsurance premiums are calculated as a percentage of
the sum insured in accordance with the postcode of the
property being reinsured. Each postcode is assigned to
one of four Tiers, Tier A (0.033%), Tier B (0.030%), Tier C
and D (0.006%) having regard to the population density in
a postcode area. The business interruption rate is 0.019%,
regardless of the postcode. Further discounts are available
for certain exposure types and rst loss limits.
Maximum scheme paid losses
Pool Re has paid total claims of GBP 635 million with
respect to 16 separate certied terrorism claims,
the largest being a loss of GBP 262 million after the
Bishopsgate bombing in April 1993.
Private reinsurance arrangements,
government guarantees and structure
Pool Re obtains reinsurance cover on behalf of all its
members from the professional reinsurance markets (rst
purchased in 2015) as part of a multi-layered program:
First – market retention, being GBP 250 million per
event and GBP 400 million in the annual aggregate, to
be co-insured by direct insurers;
Second – GBP 500 million payable out of the Pool Re
Investment Fund in excess of the market retention;
Third – a reinsurance layer underwritten by the
international reinsurance market, being GBP 2.1 billion
in excess of the rst GBP 500 million and market
retention as of 2018;
Fourth – the remainder of the Pool Re Investment Fund
in excess of the underlying layers, standing at almost
GBP 6 billion (overall fund being almost GBP 6.5 billion,
with the rst GBP 500 million being in the second layer)
as of 2018;
Fifth – government surety in case of exhaustion of all
other funds and reinsurance provisions including initial
payment from a Hypothecated Fund.
Compulsory or elective?
Insurance: Elective. However, if the insurance buyer
accesses Pool Re on one policy, they must purchase
and access it on all in scope policies (the “All or Nothing”
principle).
Reinsurance: Insurers may elect to be a member, but it
is compulsory for members to oer Pool Re coverage
on all in scope insurance policies and cede all in scope
terrorism risks to the pool.
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Summary
Prior to the 9/11 attacks, most standard commercial property and casualty
insurance policies in the United States did not exclude coverage for losses
resulting from terrorism. The events of September 11, 2001 resulted in
approximately USD 44 billion of property and casualty insurance losses (2016
gures), of which more than two-thirds was paid by reinsurers to insurers.
Subsequently, the Terrorism Risk Insurance Act of 2002 (TRIA) was enacted
and requires insurers to make coverage available for terrorism risk on certain
lines of commercial property and casualty insurance. To assist insurers with this
nancial exposure, the Terrorism Risk Insurance Program (TRIP or Program) was
established, under which certain losses resulting from a certied act of terrorism
are eligible for reimbursement.
Terrorism risk
Medium-low
United States of America
TRIP (Terrorism Risk Insurance Program)/FIO (Federal Insurance Oce)
Denition of terrorism
An “act of terrorism” is an act certied by the U.S. Secretary
of the Treasury, in consultation with the Attorney General
of the United States and the U.S. Secretary of Homeland
Security, to:
Be an act of terrorism;
Be a violent act that is dangerous to human life, property
or infrastructure;
To have resulted in damage within the United States; and
To have been committed by an individual or individuals
as part of an eort to coerce the U.S. civilian population
or inuence U.S. government policy or conduct through
coercion.
Scope of coverage
TRIP-eligible lines of coverage include most types of
commercial property and casualty insurance (subject
to dened exceptions), including: re and allied lines,
commercial multiple peril (liability and non-liability portions),
ocean marine, inland marine, workers’ compensation, other
liability, products liability, aircraft (all perils), and boiler and
machinery. The program has a statutory annual cap of USD
100 billion.
No federal or private assistance
82%
government
$0
Trigger: $160M
Coshares
Cap: $100B
18%
insurer
20% insurer deductible
(equal to 20% of previous year direct
earned premiums)
No federal assistance
Note: Trigger rises to USD 180 million in 2019 and USD 200 million in
2020; coinsurance rises to 19% in 2019 and 20% in 2020.
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Nuclear, chemical, biological and
radiologicalcover
Government reimbursement is available if the loss is
covered under the policy and otherwise arises from a
certied act of terrorism.
Summary of exclusions
Perils excluded: War (except for workers’ compensation
insurance). No other perils are excluded by the terms of
TRIP, although a peril excluded by the policy would not be
subject to reimbursement under the Program.
Classes excluded: Crop insurance, ood insurance,
earthquake insurance, private mortgage insurance or
title insurance, nancial guaranty insurance, medical
malpractice insurance, health or life insurance,
reinsurance or retrocessional reinsurance, commercial
automobile insurance, burglary and theft insurance,
professional liability insurance, surety insurance, farm
owners multiple peril insurance, reinsurance.
Additional information: Although NCBR events are
not excluded, it is necessary to look at the ambit of the
contract as TRIA covers insured losses as dened by the
terms of the relevant insurance cover.
Territorial scope of scheme
Coverage only in the United States (although losses to
certain U.S.-based vessels overseas and to U.S. missions
are covered as well).
Premium rates
Insurance rates for insureds: Insurers are free to set
their own terrorism premiums for their underlying policies
to insurance buyers, according to normal commercial
arrangements. Premiums charged by insurers on
individual policies are typically a portion of the total
premium for the policy in question. Whilst in many cases
this is very small (1-2%) and in some situations cover is
provided for no additional charge, these amounts can
vary by jurisdiction, locality and line of coverage (in some
cases up to 43%).
Reinsurance rates for members: The program does
not purchase private reinsurance in connection with
the payment obligations existing under it, nor does the
Treasury charge a premium to participating insurers for
the protection provided by the program. In the event
that federal payments are made to insurers under the
program, TRIA includes a mechanism for the Secretary
to recoup “terrorism loss risk-spreading premiums” from
insurers. This applies to all insurers of TRIP-eligible lines.
Maximum scheme paid losses
Thus far, the Secretary has not certied any event as an
“act of terrorism” under TRIA, and no losses have been
reimbursed by the program.
Private reinsurance arrangements,
government guarantees and structure
The US government provides a reinsurance backstop
to all licensed insurers up to USD 100 billion in the
aggregate per year, but the insurers must retain:
Any insurance industry-wide losses below
USD 160 million in the aggregate per year (rising to
USD 180 million in 2019 and USD 200 million in 2020);
A deductible equal to 20% of their previous year’s
direct earned in scope premium;
A co-insurance in excess of the deductible of 18%,
rising to 19% in 2019 and 20% in 2020.
Insurers that write terrorism risk insurance often obtain
private reinsurance for some portion of the terrorism
risk that they retain that is not subject to reimbursement
through the program.
Compulsory or elective?
Insurance: Elective (unless required as a matter of
State law, which is the case concerning workers’
compensation).
Reinsurance: Elective although insurers may retain or
reinsure any terrorism risk via any route they so wish
such as using TRIP, the private reinsurance market or a
combination of both, but TRIP coverage is automatically
available to US licensed insurers.
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Summary of terrorism
insurance arrangements
in other territories
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Africa
African Trade Insurance Agency (ATI)
In 2001, ATI was launched as a pan-African institution providing political risk
insurance to member African countries. ATI helps insurance companies in the
member countries that oer coverage against property damage and business
interruption as a consequence of political violence and terrorism but who have
insucient capacity for coverage. The political violence that erupted in Kenya
after the 2007 general election and the Westgate Mall terrorist attack in 2013
(for which ATI contributed to nearly USD 50 million in paid losses) illustrate
a demand for such cover, with the latter prompting a particular demand in
property damage policies. The ATI currently boasts membership from 14
countries and substantial institutional support. The terrorist threat in East
Africa is high, and Kenya is arguably the most vulnerable since its intervention
in Somalia in 2011 resulted in the Al-Shabaab terrorist group declaring war on
the country.
Terrorism risk of membership countries
Bahrain
The Arab War Risks Insurance Syndicate (AWRIS)
Originally established in 1981 to protect local markets and provide war cover
during the Iran-Iraq War, AWRIS allows member Arab countries, and in-country
insurers that sign up to the scheme, to purchase reinsurance for terrorism
and strikes, riots and civil commotion risks through Lloyd’s as well as other
main European reinsurers. AWRIS now boasts membership of 187 insurance
companies from 18 Arab countries and provides a successful pan-Arab
partnership. It regularly reviews rates to help minimize competition, increase
the capacity in the region, ensure adequate coverage for members and fairly
distribute annual prots made by AWRIS.
Terrorism risk
Medium-low
Terrorism risk
Per country
Benin – Low Malawi – Extremely low
Burundi – Medium Rwanda – Low
Côte d’Ivoire – Medium South Sudan – High
Democratic Republic of Congo – High Tanzania – Low
Ethiopia – Medium Uganda – Low
Kenya – Medium-high Zambia – Extremely low
Madagascar – Extremely low Zimbabwe – Extremely low
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Finland
Finnish Terrorism Pool
The Finnish Terrorism Pool was created in 2008 to provide a nal level of
reinsurance in case of a catastrophic event or major terrorism loss occurrence
and all traditional measures fall short. Membership is elective, however only two
insurance companies in Finland are not part of the scheme. The pool is designed
to respond to loss only after all other remedies are exhausted in traditional
reinsurance markets.
Terrorism risk
Very low
Terrorism risk
Medium-low
Hong Kong
The Motor Insurance Bureau (MIB) — Hong Kong Motor Terrorist
Pool
Under the umbrella of the MIB, the pool was established in 2002 to solely cover
claims made by innocent persons injured in a terrorist attack in Hong Kong only
in incidents where a motor vehicle was used as the weapon. The pool retains a
limited facility of up to HKD 200 million from the MIB’s “First Fund.”
Terrorism risk
Signicant
Indonesia
Indonesian Terrorism Insurance Pool (MARIEN)
Established in 2001, MARIEN is an elective institution that operates without
government involvement and, since its inception, provides terrorism and sabotage
coverage for all property (excluded in local property policies). Following recent
attacks in 2018, such as three suicide bombers of one family who targeted
three churches in the capital, the President Director of MARIEN announced that
business interruption is now included in their terrorism and sabotage product.
However, strikes, riots and civil commotion, insurrection, revolution, civil and other
war, dispossession of locked out workers and invasion are all still excluded.
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Namibia
Namibia Special Risks Insurance Association (NASRIA)
In 1987, NASRIA was formed to provide reinsurance for politically motivated
acts, which were common in the years before independence and were
excluded in the insurance market. Although membership is elective, it was
granted a monopoly over special risks reinsurance with backing provided by
the government. After Namibia gained independence, the lines between a
politically and non-politically motivated violent act became more complex, and
so cover was extended in an amended Finance Act to later include property
damage and consequential loss caused by strike, riot and civil commotion;
acts to overthrow or inuence any state or government or local authority by
means of fear, terrorism or violence; acts with a political objective or to bring
about social or economic change, or in protest against (authority) or for the
purpose of inspiring fear in any section of the public. Since inception, NASRIA
has thus far earned over NAD 200 million in premiums from claims.
Terrorism risk
Extremely low
Terrorism risk
Low
Northern Ireland
Criminal Damage (Compensation)(Northern Ireland)
Order1977
The scheme provides a right to claim compensation for malicious or wanton
damage to agricultural property, and for non-agricultural property where it can
be shown that the damage was caused: a) unlawfully, maliciously or wantonly
by three or more persons unlawfully, riotously or tumultuously assembled
together; or b) as a result of an act committed maliciously by a person acting
on behalf of, or in connection with, an unlawful association an act of terrorism.
Anyone who has an interest in the property which has been damaged in any of
the circumstances described above and who suers a loss of more than
GBP 200 because of that damage may apply for compensation under the
Scheme.
Sri Lanka
Strike, Riot, Civil Commotion and Terrorism (SRCC & T) Cover
of the National Insurance Trust Fund
Established in 1987, the SRCC & T fund provides reinsurance for strikes, riot,
civil commotion and terrorism activities as an elective extension to basic
insurance policies issued by its member companies. In 2006 it was absorbed
by the National Insurance Trust Fund (NITF), a public insurance agency. It
currently holds 16 members, all of whom are Sri Lankan insurance companies,
and provides coverage for all property loss or damage caused by strikes,
riots, civil commotion and & terrorism acts within the geographical limits of Sri
Lanka.
Terrorism risk
Low
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Switzerland
Terrorism Reinsurance Facility
The facility was established in 2003 and allows insurers to cede all property
risks for terrorism reinsurance. All primary property policies incepted after its
establishment with insured excess of CHF10 million exclude terrorism risks and
are thus covered by the facility.
Terrorism risk
Extremely low
Terrorism risk
Extremely low
Taiwan
Taiwan Terrorism Insurance Pool
Established in 2004, the pool provides terrorism coverage for personal accident
business in order to share the risk among private insurance companies and
the Central Reinsurance Corporation (Central Re). Administered by Non-Life
Insurance Association in Taiwan, the scheme is capped at USD 31 million.
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Summary of pools
Country/Pool Scope of cover NCBR cover Exclusions Premium rates Reinsurance and government Compulsory or Elective
Australia
Australian Reinsurance Pool
Corporation (ARPC)
Commercial risks, industrial
risks, construction risks and
farming (where the farmer has
BI insurance covering their farm)
Chemical and
biological covered,
nuclear and
radiological risks
are not
Perils: Nuclear risks, travel, cybercrime
Classes: Residential property, government assets, marine, motor, workers
compensation, life, aviation, railway stock and tram stock, nancial products
Insurance: Insurers can set commercially
Reinsurance: Between 2.6% and 16% dependent on
location/postcode
Reinsurance: AUD 3 billion
Government: AUD 10 billion guarantee
Insurance: Compulsory to include cover
Reinsurance: Elective for insurers to participate
in ARPC scheme
Austria
Oesterreichischer
Versicherungspool zur
Deckung von Terrorisiken
Most property lines (industrial,
commercial and private), other
than transport insurance
Not covered Perils: Biological risks, chemical risks
Classes: Non damage business interruption, liability, marine, aviation and
transportation
Insurance: Insurers can set commercially
Reinsurance: Between 0.75% and 12% dependent on
membership
Reinsurance: EUR 100 million (EUR 200 million in the
aggregate)
Insurance: Elective for most lines
Reinsurance: Elective for insurers to participate
in the scheme
Belgium
TRIP (Terrorism Reinsurance
and Insurance Pool)
Most property and casualty
lines
Bacteriological
and chemical risks
covered, nuclear and
radiological risks
are not
Perils: Nuclear
Classes: Nuclear facilities and energy, railway rolling stock, aircraft and ships
Insurance: Insurers can set commercially
Reinsurance: Proportional contribution for pool
reinsurance and running costs
Reinsurance: EUR 651 million
Government: EUR 300 million
Insurance: Compulsory to include cover in
“mass” insurance policies
Reinsurance: Elective for insurers to participate
in TRIP scheme
Denmark
TIPNLI (Danish Terrorism
Insurance Pool for Non-Life
Insurance)
NCBR only Covered Perils: non-NBCR perils
Classes: Life insurance
Insurance: Insurers can set commercially
Reinsurance: Proportional contribution for pool tari
Government: DKK 15 billion Insurance: Elective
Reinsurance: Compulsory for Danish
companies who write NCBR cover
France
GAREAT (Gestion de
l’Assurance et de la
Réassurance des Risques
Attentats et Actes de
Terrorisme)
Comprehensive cover
for damage and business
interruption to industrial,
commercial and home owner
properties
Covered Classes: Construction liability, aircraft hull insurance, marine hull, cargo and
railway rolling stock insurance, , bodily injury, third party liability, non damage
business interruption, overseas business interruption
Insurance: Insurers can set commercially
Reinsurance: Pre-set rates depending on sums
insured per policy
Reinsurance: EUR 2.1 billion large risks scheme,
EUR 355 million small/medium risks scheme
Government: Unlimited guarantee
Insurance: Compulsory to include cover
Reinsurance: Compulsory for large risks,
elective for small/medium risks
Germany
Extremus
Commercial property damage
and business interruption
Not Covered Perils: NCBR
Classes: Aviation, marine, life, personal accident
Insurance: Insurers can set commercially
Reinsurance: Pre-set rates depending on sums
insured per policy
Reinsurance: purchased within rst EUR 2.5 billion
market retention
Government: EUR 7.5 billion
Insurance: Elective
Reinsurance: Elective
India
Indian Market Terrorism Risk
Insurance Pool (IMTRIP)
Fire Insurance, Industrial All
Risks Insurance, Property
section of Engineering
insurance, Property section
of package/miscellaneous
insurances
Not Covered Perlis: NCBR
Classes: Aviation, marine, life, personal accident
Fixed rates are decided by a Pool Underwriting
Committee and dierentiated by risk class and
location
Reinsurance: INR 36 billion in excess of INR 4 billion Insurance: Elective
Reinsurance: Compulsory for all Indian insurers
to cede to the pool
Israel
The Victims of Hostile
Actions (Pensions) Law
and The Property Tax and
Compensation Fund Law
Direct damage to property and
household contents
Covered Classes: State-budgeted body, health, government, higher education, public
institutions or non-prot organization
Payable by taxes. Additional cover between 0.3%-
4.5%
Government: percentage of the purchase tax collections
allocated to the fund each year
Coverage is guaranteed for all Israeli residents
Netherlands
Nederlandse
Herverzekeringsmaatschappij
voor Terrorismeschaden
N.V. (NHT - Dutch Terrorism
Reinsurance Pool)
Most property and casualty
lines
Covered Classes: Aviation hull, aircraft liability, nuclear risks and specic insurances
which cover terrorism as a named peril, other than the terrorism clause
Insurance: Insurers can set commercially
Reinsurance: Proportional contribution for pool
reinsurance and running costs
Reinsurance: EUR 750 million
Government: EUR 50 million
Insurance: Elective
Reinsurance: Elective
Russia
RATIP (Russian Antiterrorism
Insurance Pool)
Most property and casualty
lines
Not Covered Perils: NCBR, cyberattack
Classes: Airplanes/other aerial devices or vessels, ships or riverboats,
animals
Dierentiated by risk class and location Reinsurance: USD 220 million Insurance: Elective
Reinsurance: Elective for insurers to participate,
but all members must cede to the pool
South Africa
South African Special Risk
Insurance Association -
SASRIA SOC LTD
Personal and commercial
property, material damage,
business interruption, money,
goods in transit and motor and
construction
Not Covered Perils: Nuclear, chemical, biological and radiological
Classes: Life, personal injury
Insurance: Between 0.003% - 0.0528% dependent
on risk prole
Reinsurance: Above rates paid to SASRIA, less a
processing fee
Reinsurance: Protection varies by cover
Government: ZAR 1 billion guarantee
Insurance: Elective
Reinsurance: All terrorism insurance must be
purchased via SASRIA
Spain
Consorcio de Compensacion
de Seguros (CCS)
Most property lines, life,
personal accident, and business
interruption
Implied coverage Classes: Third-party liability, transport, construction, aircraft, marine,
agricultural and travel
Insurance: Between 0.00025‰ - 1.63‰ dependent
on risk prole. Flat rates for motor, between EUR 0.30
- EUR 26.60
Reinsurance: Above rates paid to CCS, less a
processing fee
Government: State guarantee, never been invoked Insurance: Compulsory
Reinsurance: All terrorism insurance must be
purchased via CCS
United Kingdom
Pool Re
Commerical property damage
and business interruption
Covered Limited cover: computer hacking, virus and denial of service attack
Classes: Marine, aviation or transit policies, motor (auto) policies, reinsurance
business, general liability, life or personal injury insurance
Insurance: Insurers can set commercially
Reinsurance: Between 0.006% and 0.033%
dependent on location/postcode
Reinsurance: GBP 2.1 billion
Government: Unlimited
Insurance: Elective
Reinsurance: Elective for insurers to participate,
but all members must cede to the pool
United States
TRIP (Terrorism Risk
Insurance Program)/FIO
(Federal Insurance Oce)
Most property and casualty
lines
Covered (if covered
in the underlying
policy)
Perils: No key perils are excluded, but a peril excluded by the policy would not
be subject to reimbursement under TRIP
Classes: Crop insurance, ood insurance, earthquake insurance, private
mortgage, medical malpractice, health or life, reinsurance, commercial
automobile, professional liability
Insurance: Insurers can set commercially
Reinsurance: No set rates but recoupment plan to
apply after a loss
Government: USD 100 billion per year Insurance: Elective (unless required as a matter
of State law)
Reinsurance: Elective but automatically
available to US licensed insurers
4544
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