Most people in the world enjoy basic freedoms like the ability to eat in restaurants, attend concerts, dance at a nightclub or simply
walk down the street, yet terrorists have found a way to disrupt these activities over the past 12 months.
I'm currently writing this blog from my hotel in London. I was finishing up dinner here on Saturday night when I was interrupted by dozens of texts asking, "Are you ok?" I saw a TV in the lobby with a red banner across the bottom saying, "Terror in London."
Several months ago, I purchased tickets to Phil Collins' Farewell Tour in Liverpool, which initiated this London trip where I was able to mix business and pleasure. Two weeks ago, Manchester was shaken by a bombing following the Ariana Grande concert leading to friends asking me, "Are you still going to go?" Then, urging me to "Be Careful!"
The truth is - since September 11th, I've always been careful. September 11th was my first taste of hate and violence in my naïve world. During my coping as a young teenager, I unfortunately learned that terrorism, whether performed by domestic of foreign perpetrators, was going to be talked about in my generation's history books.
Terrorism anywhere affects all of us in different ways. First, it affects the people/families/friends of those at the site, the businesses where the act took place and the surrounding communities. The residual impact of a terror event is all of us questioning our safety and how we should spend our time. Despite these terror attacks, we are nevertheless a resilient society and continue to live our lives. I continued with my Sunday plans for brunch with old friends and headed to Kensington Palace to see the Princess Diana exhibit.
Outside of the social impact of a terror event, as a Property Underwriter, I inherently think about the economic impact. My friends and family are often surprised that there is insurance coverage for terrorism. The claims are mainly related to property damage, workers compensation and business interruption.
Without getting into too much detail, many countries around the world have federal aid for financial loss resulting from terrorism. See- OECD - Terror Programs around the world. The purpose of the backstops are to provide the economy with stable and affordable coverage for a peril that is difficult to assess.
Smaller, localized events will most likely be within the insured's retention and the federal support won't assist in funding the claims. We are seeing many more of these "lone wolf" attacks. There has been 3 attacks in the UK in the past 3 months. As an insurance industry, are we contemplating this increased frequency adequately in our terror risk models?
Homeowners or business owners can protect their assets from terrorism through insurance. As a member of society, we need to protect ourselves which means we must continue to be aware of our surroundings and live our life. I always tell my parents when they're concerned about my next travel adventure - "you should be lucky I am not driving on the road, the probability of a car accident is still much higher than a terror event." Of course, that doesn't mean we shouldn't remain vigilant and protect both the sanctity of life and the assets that help us to enjoy it.
Category: Climate/natural disasters: Resilience