Lack of capacity and demand hindering terror market expansion: GC

The changing terror risk landscape, underlined by an increased focus on “mass casualty and fear-inducing” events, suggests a need for greater capacity and a different approach to the peril, according to Guy Carpenter Managing Director, Charles Gibbs, and Vice President, Jamie Russell.

“There has been a major shift in the focus of terror attacks towards mass casualty and fear-inducing events, and away from physical damage. Yet, terrorism pools are built primarily to address catastrophic damage, while the private market is also geared towards managing this increasingly frequent but minor component of the loss,” said Gibbs.

In recent times the terror risk landscape has changed dramatically, with events occurring across Europe, ranging from vehicles being used as weapons to bombings and knife attacks.

In light of the evolving landscape insurers and reinsurers are faced with new challenges to create affordable and effective solutions that meet the needs of clients.

“We are, however, seeing the emergence of more relevant coverage, designed to address non-physical damage-related losses such as loss of attraction, denial of access and active assailant and shooter.

“The issue is more that capacity is limited, and while the threat potential is growing, terrorism remains a specialist market. The challenge is not so much the diversity of cover, but rather the scalability and distribution,” said Russell.

According to the reinsurance broker’s Gibbs, the lack of scale is driving an imbalance in the marketplace, with the terror risk sector leaning heavily towards larger-scale corporations over smaller businesses, which could also benefit from terrorism protection.

Gibbs, expands on this point; “Limited capacity is driving a much greater market focus on corporates simply because they can generate a better premium return. We must work out how to expand the terrorism insurance remit to companies that lack the financial ballast to ride out the shorter-term.

“The small number of players offering terrorism cover significantly heightens the potential for accumulation risk if efforts were made to push cover into the wider market. At present, there simply isn’t the incentive to extend out to the SME sector.”

However, as seen with other emerging and large-scale perils, a lack of modelling surrounding terror is detrimental to the evolution of the sector, a point Russell expanded on.

“The models are limited by a lack of claims data especially for the more diverse covers now on offer. Development in this area will aid insurers with their portfolio management and unless this is addressed, coupled with modelling capabilities that can support improved frequency analysis, insurers will continue to be restricted in how far they can extend their insurance offering,” said Russell.

Adding to the challenges a lack of modelling drives, according to Gibbs, is a lack of sufficient market that is limited market expansion.

“To extend current modelling capabilities will require extensive R&D investment. To make that investment to scale-up the terrorism offering will require audible customer demand.  At present, we are not hearing the calls for cover, as many either do not sufficiently understand the threat, or do not consider themselves exposed to the peril.

“If we are to create a substantial terrorism market we must create the modelling acumen to support the industry’s efforts to shift from a reactive, opportunistic approach to providing cover to a more proactive one that extends beyond the larger corporates, while also working to raise awareness of the perils to stimulate appetite at the SME level.”

One Year Later, Renewal and Awareness at The Heart of the Blast

West 23rd St. on the morning of Sun., Sept. 18, 2016, with the block between Sixth and Seventh Aves. closed to vehicular and pedestrian traffic. Photo by Scott Stiffler.

BY EILEEN STUKANE | Words on the Council of the City of New York Proclamation, framed and hanging near the front door of the Malibu Diner, honor the character and service of everyone there, and eloquently recall Sept. 17, 2016: “It began as a beautiful September day, not so different from a Tuesday in September 15 years ago, with New Yorkers of every age and background simply going about their lives,” the Proclamation reads, continuing, “In an instant, however, the beauty of the day was shattered… Around 8:30pm, on West 32rd Street in Manhattan, a homemade bomb exploded in a dumpster, injuring 31 people, including two dozen taken to the hospital, and terrifying almost everyone who heard it.”

A year later, commerce on W. 23rd St. between Sixth and Seventh Aves. is as normal as ever. With the exception of boarded up windows on two unoccupied buildings, the boulevard shows no signs of the explosion that propelled shrapnel into concrete, bricks, cars, and people, and blew out storefronts and windows. Yet on this anniversary of the blast, aftereffects range from on one hand, a stronger sense of community, a positive awareness of shared resilience, to on the other hand, personal anxiety issues.

The explosion, which within two days was identified as the alleged terrorist act of 28-year-old Ahmad Khan Rahimi, occurred in a dumpster containing debris from an extensive and ongoing renovation of Selis Manor (135 W. 23rd St.), a 14-story building with 205 studio, one- and two-bedroom apartments, public housing for the blind and visually impaired. The dumpster was located on the eastern end of the building. Fortunately, that Saturday night most of the residents were playing Bingo in the building’s ground floor game room on its western end. Although windows were shattered as high as the fourth floor, no one was injured, at least not outwardly. A resident of Selis Manor, Helen Murphy, 65, remembers the “BABOOM” sound and a friend suggesting maybe it was a gas explosion. While she feels that everyone came together as family and calmed each other during the crisis, “I don’t want to be in crowds anymore. I avoid subways, buses, I get very claustrophobic. Now I take cabs.”

Councilmember Corey Johnson with Helen Murphy during a visit to Selis Manor on Tues., Sept. 20, 2016. Murphy recently told Chelsea Now she still experiences anxiety as a result of her proximity to the explosion. Photo by William Alatriste/NYC Council.

VISIONS at Selis Manor/Services for the Blind and Visually Impaired, a rehabilitation and social service organization offering support and counseling for the tenants of Selis Manor as well as other visually impaired New Yorkers, is on the ground floor of Selis Manor, on the side of the building closer to that dumpster a year ago. Then and now, the organization was less concerned about property damage than it was about the residents.

“Tenants are mixed ages, have been blind for different periods of time, and come from very, very different backgrounds,” explained Nancy D. Miller, LMSW, VISIONS executive director/CEO. “For tenants who had previously had any trauma in their lives, that anxiety and reaction to trauma was brought up again, because in those first few days nobody knew exactly what had happened. They also felt extremely vulnerable since there was so much media coverage of the building. They felt that everybody now knew it was a building for the blind and they would be at increased risk.” Licensed social workers at VISIONS together with social workers from NYC’s Service Program for Older Persons (SPOP) counseled tenants for issues Miller says lingered for about six months following the explosion, “and a few people are in longer-term treatment for anxiety that may not have been caused by the bombing but was exacerbated by the bombing,” she added.

Back row, L to R: State Senator Brad Hoylman, Assemblymember Dick Gottfried, Councilmember Corey Johnson and Mayor Bill de Blasio visited Selis Manor on Tues., Sept. 20, 2016. Photo by William Alatriste/NYC Council.

On the practical side, since the blast shut down the elevator at Selis Manor, VISIONS has stocked a greater quantity of emergency supplies for all the apartments. “It’s a lot of water, cereal, packaged milk, diapers, on the main floor,” Miller noted. In the same vein, Joyce Carrico, president, Tenants Association of Selis Manor, has urged tenants to keep canned goods and other rations in their homes. “We’re still trying to get evacuation chairs for people who are wheelchair-bound,” she added. Carrico has been conferring all year with the Mayor’s Office for People with Disabilities, and other agencies, to fulfill this critical need, revealed by the explosion.

King David Gallery (131 W. 23rd St.) is a custom interior design provider, gallery, and custom framer. Located next door to Selis Manor, King David today sparkles with samples of its many customized mirrors, glass shower stalls, and artwork framed under glass — looking very different from a year ago, when the explosion blew out the entire storefront and caused a crash of glass from shattered mirrors, stalls, frames, and artwork.

King David Gallery, boarded up as a result of damaged sustained from the explosion. Photo by Daniel Kwak.

Sarit Peretz, co-owner with other members of her family, vividly recalls the night of the blast when her family was gathered at her mother’s house. “My brother got a phone call from a client who lives down the block, who told him ‘Your store blew up,’ ” she said. Through her phone, she checked the security cameras and saw broken glass everywhere and the police and FBI in the store. “It was like a crime scene,” she recalled, “blood splattered on the mirrors, on the floor. I guess people were hurt outside from the impact of the explosion and were flung into the storefront.”

It took about 10 days for the store to be up and running again, having sustained damages costing well into the six-figure range. Like other businesses along W. 23rd St., King David Gallery turned over its security cameras to the FBI. (As other business owners have noted, these cameras do not get returned so added to the cost of any damage is the purchase of a new security system.) “We come from Israel, not that we’re used to this, but we know what it feels like,” Peretz said. “We had detectives coming in every day, for a whole month, reporters in and out, a press conference was held in front of the store.”

Overall, insurance companies only compensated minimally for loss of business up and down the street. Councilmember Corey Johnson’s office worked with businesses in the aftermath, connecting them with the appropriate city agencies that could help, such as the NY Superintendent of Financial Services (formerly Superintendent of Insurance).

The damaged windows of Orangetheory Fitness, the only business to report having terrorism insurance at the time of the blast, took months to repair. Photo by Scott Stiffler.

“There was a lot of red tape and bureaucracy and we were making sure businesses were able to reopen as quickly as possible, especially the ones that were immediately next to the blast, like King David,” said Johnson, who was instrumental in organizing the Small Business Crawl of Sat., Sept. 24, 2016, which encouraged New Yorkers to shop on the block of W. 23rd St. that was closed to pedestrian traffic for nearly 48 hours after the bombing. King David Gallery has now signed up for terrorism insurance, which before the blast was an option either unknown or not considered by many Chelsea business owners. The Townhouse Inn of Chelsea (131 W. 23rd St.), a 14-bedroom hotel and the building in which King David Gallery is located, also incurred considerable damages from the explosion. No one at Actium Group, the owner, responded to our requests to talk about the Inn’s recovery.

Across the street from the heart of the blast, Orangetheory Fitness (124 W. 23rd St.) had its storefront windows shattered and destroyed, but the glass storefronts of  La Maison du Macaron (132 W. 23rd St.), directly across from Selis Manor, were miraculously untouched. Today it’s business as usual. The owners of Orangetheory Fitness did not want to comment on this anniversary.

Pascal Goupil arrives in the early morning to create freshly baked pastries for his La Maison du Macaron, which escaped damage from the explosion directly across the street. Photo by Eileen Stukane.

Pascal Goupil, owner of La Maison du Macaron, cozy café, macaroon and pastry shop, was not in the shop at the time of the blast but two female employees were behind the counter. “The dumpster was 20 yards from the shop. It could have come straight through and killed everybody. That was lucky,” Goupil recalled. He praised the city agencies for their work in the aftermath, noting, “There were lots of people coming in to see if there was any need. They were fantastic.”

Lorena Velastegui and Paul Allwright, seen here at the Malibu Diner, were among the Red Cross volunteers serving community needs following the W. 23rd St. explosion. Photo by Eileen Stukane.

“When it comes to difficult moments, we are united and it helps a lot,” said Alex Grimpas, co-owner of Malibu Diner (163 W. 23rd St.), which became a hub for city agencies and the Red Cross during the three days that the street and other businesses were closed down. Governor Andrew Cuomo and Mayor Bill de Blasio, working with the Red Cross, allowed Malibu to open a day after the blast in order to provide meals for tenants at Selis Manor that the Red Cross delivered, and to continue offering regular breakfasts for tenants who know the number of steps to take from their building to the diner, where they socialize and enjoy a meal outside their apartments. Grimpas reached out to support responders from the FBI, NYPD, FDNY, NY Office of Emergency Management, and American Red Cross, by offering Malibu’s facilities and food.

The Tuesday after the blast, Mayor de Blasio, joined by a number of city officials, visited Malibu and spent 45 minutes in a booth, eating and chatting with Chelsea residents. That affirmation from the Mayor, the Proclamation from the NY City Council, and a plaque of appreciation from the NYPD, are touching and important to Grimpas. “The Proclamation will stay on the wall forever,” he said. “You want to work hard and make money but you have to think about the people who live close to you, to give before you take.”

After the blast, Malibu Diner offered a hub for first responders, and prepared meals for the blind and visually impaired residents of Selis Manor. Co-owner Alex Grimpas stands with the City Council’s Proclamation of appreciation and a plaque of recognition from the NYPD’s 13th Precinct. Photo by Eileen Stukane.

L to R: Zina Kirko and Natalie Heras were working at La Maison du Macaron on the night of Sept. 17, 2016, and comforted a family who ran into the shop after the explosion. Photo by Naeisha Rose.

At right, the vacant St. Vincent de Paul Church (123 W. 23rd St.) was boarded up shortly after the explosion shattered its windows. At left, the building housing King David Gallery and The Townhouse Inn of Chelsea also sustained damage. Photo by Scott Stiffler.

Sarit Peretz, one of the family owners of King David Gallery, initially viewed the extensively damaged business through her smartphone connection to the store’s security cameras. Photo by Eileen Stukane.

Three days after the bombing, Orangetheory Fitness owner Jessica Kumari (right) noted, “I’m happy we could help,” regarding the widely disseminated internal and external footage from her 124 W. 23rd St. storefront business. Surveillance cameras showed a flash from the blast, people running, and the studio’s shattered windows. Photo by Scott Stiffler.

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Local municipalities now opting in for terrorism insurance

OSCEOLA COUNTY, Mich. (WPBN/WGTU) — Terrorism is something on the forefront of many of our minds lately, including our local governments.

Now, there’s a way to help protect the community, should an act of terrorism happen.

LeRoy Township in Osceola County may be small, but when the option was brought up by their insurance agent about a month ago, they decided it’s better to be safe than sorry.

“It’s LeRoy,” said their township clerk, Stacie Dvonch. “It’s probably one in 10 million shot that anything would ever happen there, but you never know.”

LeRoy is a community with a hardware store, one stop light, and less than 2,000 people.

But when the township was offered terrorism insurance, they opted in.

“We just decided you know for a little amount of money it can cover a whole lot so we might as well go ahead and try it,” said Dvonch.

For a whole year, it only costs the township $22.

A cost they, along with several other townships in Michigan, say is worth paying.

“It is a very inexpensive endorsement,” said Principal Agent with Burnham & Flower Insurance Group, Steve Johnson. “Why? Because the odds of a terrorist attack happening in LeRoy Township or anywhere are just very nominal.”

But, it could happen. And if it did the insurance would cover any property damage caused from an act of terror.

“Say somebody hacked into our accounts and took all of our money it would cover damage to any buildings or any property that we have around the community,” said Dvonch.

It covers both domestic and foreign terrorism, and Dvonch says a recent event also made her consider this more seriously.

“Seeing what happened in Charlottesville and seeing the hurt it caused people and somebody passing away and all that kind of stuff, it just makes you think and you want to make sure you’re covered in any way shape or form,” said Dvonch.

The policy is a federal backed insurance, meaning that the federal government has to declare it an act of terrorism before it would be covered under this policy.

Johnson says they cover a couple hundred townships in Michigan, and nearly half have opted in for the terrorism coverage, likely because of the small cost.

Scalability Critical to Developing Substantial Terrorism Market – GC@MC Commentary

c-gibbs-20-smjamie-russell-final-smCharles Gibbs, Managing Director and Jamie Russell, Vice President

Contact

  • Capacity a major limiting factor in expanding remit
  • Small number of players raising aggregation risk
  • Cover not reaching organizations that need it most

Restricted capacity, limited modelling capabilities and a lack of demand from smaller organizations are severely hampering the industry’s ability to generate a substantial terrorism market, according to Charles Gibbs, Managing Director, and Jamie Russell, Vice President, at Guy Carpenter.

“There has been a major shift in the focus of terror attacks towards mass casualty and fear-inducing events, and away from physical damage,” explains Gibbs. “Yet, terrorism pools are built primarily to address catastrophic damage, while the private market is also geared towards managing this increasingly frequent but minor component of the loss.”

“We are, however, seeing the emergence of more relevant coverage, designed to address non-physical damage-related losses such as loss of attraction, denial of access and active assailant and shooter,” Russell explains. “The issue is more that capacity is limited, and while the threat potential is growing, terrorism remains a specialist market. The challenge is not so much the diversity of cover, but rather the scalability and distribution.”

This limited scale is creating a market imbalance, adds Gibbs, with the sector heavily weighted towards larger-scale corporations, rather than smaller businesses that could benefit most from terrorism cover.

“Limited capacity is driving a much greater market focus on corporates simply because they can generate a better premium return. We must work out how to expand the terrorism insurance remit to companies that lack the financial ballast to ride out the shorter-term,” he says.

Yet, for this to happen, the market has to evolve beyond its specialty origins, or run the accumulation gauntlet. “The small number of players offering terrorism cover significantly heightens the potential for accumulation risk if efforts were made to push cover into the wider market,” Gibbs continues. “At present, there simply isn’t the incentive to extend out to the SME sector.”

Restricted modelling capabilities on the terrorism front remain a stumbling block to this evolution. “The models are limited by a lack of claims data especially for the more diverse covers now on offer,” Russell says. “Development in this area will aid insurers with their portfolio management and unless this is addressed, coupled with modelling capabilities that can support improved frequency analysis, insurers will continue to be restricted in how far they can extend their insurance offering.”

Market expansion is also hindered by a lack of demand. “To extend current modelling capabilities will require extensive R&D investment,” Gibbs believes. “To make that investment to scale-up the terrorism offering will require audible customer demand. At present, we are not hearing the calls for cover, as many either do not sufficiently understand the threat, or do not consider themselves exposed to the peril.”

“If we are to create a substantial terrorism market,” he concludes, “we must create the modelling acumen to support the industry’s efforts to shift from a reactive, opportunistic approach to providing cover to a more proactive one that extends beyond the larger corporates, while also working to raise awareness of the perils to stimulate appetite at the SME level.”

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Hurricane Irma and Harvey: How We Can Protect Their Victims

As Texas begins the long process of recovery from Hurricane Harvey, and Florida braces for a possible hit from Hurricane Irma, too few victims will have the financial support of insurance payouts.

Insurance should be a critical component of disaster recovery. Federal disaster aid grants are surprisingly limited, often not more than a few thousand dollars, and it often takes months or years to get into the hands of victims. Small Business Administration loans can be obtained to help finance recovery (for households, as well as businesses), but for fast money for rebuilding, there is no substitute for insurance.

Unfortunately, the majority of those who have been inundated in Texas do not have flood insurance. Flood insurance is excluded from standard homeowners policies, but can be obtained through the National Flood Insurance Program (NFIP). Less than a sixth of those in Harris County have such coverage.

Related

Palm trees bend in the wind as Hurricane Irma slammed across islands in the northern Caribbean on Wednesday, in San Juan

Some of the reasons so few households have flood insurance are on the demand side: Before a disaster, people routinely dismiss flood risks; information on how likely a home is to flood—particularly from storm water—is difficult for homeowners to obtain; estimates of actual damage should a flood occur are rarely available; and—except when mandated by law—banks don’t require flood protection.

But the challenges with flood insurance, indeed all disaster insurance, are deeper than lack of understanding on the part of those living in risky areas. Floods, earthquakes, and other natural disasters are much harder to insure than other risks for several reasons—reasons that ultimately make the cost higher than homeowners may be willing or able to pay.

Natural disasters can be incredibly severe, such that damage to any given property could be devastating. In addition, with disasters, lots of people all suffer a loss at the same time. This is quite different than say, car accidents or burglaries, where when your next-door neighbor files a claim, you won’t also have had the same loss. When entire neighborhoods are damaged, the insurance company has lots of claims to pay all at the same time. Making matters worse, lots of lines of business may also all be impacted simultaneously, with damage to homes, businesses, cars, boats, and crops, as well as injury and mortality.

Combined, this means that insurance companies have to access large amounts of capital to cover claims in a disaster year. And having that access, whether through savings, reinsurance, or other financial instruments, is not cheap and will be reflected in prices.

It also means that insurance companies will need to limit the amount of coverage they provide or the number of policies they write in areas at the highest risk—where flooding occurs routinely, for example—in order to manage the risk of a disaster bankrupting the company.

Over the last several decades, many severe disasters have exposed these shortcomings in disaster insurance markets. Federal and state governments have intervened in many different ways in response. Most relevant for Harvey was in the late 1960s, when the federal government created the NFIP in response to a lack of flood offerings by the private sector. For similar reasons, the federal government created a program to help the terrorism insurance market; all hurricane-prone states have quasi-public entities offering wind coverage, and the California Earthquake Authority offers earthquake coverage.

While these programs have helped make insurance available, they too struggle with the potential for catastrophic losses and how to distribute those costs. The cost is often spread over lower-risk households or the program suffers from accusations that rates are “too high.”

So as disaster insurance becomes more necessary from climate change and increasing development in high-risk areas, how do we ensure that people have comprehensive, affordable insurance?

Three things would help. First, all hazards could be covered in a standard homeowners policy. This would provide disaster coverage for many more people, speeding their recovery and that of their community. This, though, does expose insurance companies to potentially catastrophic loss levels. To prevent them from going under, the government could design a program like the Terrorism Risk Insurance Program, which receives federal support when losses exceed a set threshold.

Second, the public sector, at all scales of government, must aggressively support hazard mitigation. When risks are lower, they are easier and cheaper to insure. Mitigation would also lower damages, especially those that are uninsurable, and reduce suffering. There is much cost-effective mitigation, including through tools such as land use planning, that are not being currently adopted.

Finally, there will be lower- and middle-income families in risky areas for which the costs of disaster insurance is prohibitive. Means-tested assistance should be provided to these families, coupled to assistance for financing activities to lower their risk.

With the right policies, we can help lower the damages when storms hit and also make sure that families have the resources they need to rebuild.

Carolyn Kousky is director of policy research and engagement at the Wharton Risk Management and Decision Process Center at the University of Pennsylvania.

MWWPR Names Nationally-Recognized Leader In Financial Services, Data Privacy, Technology & Health Care Policy, Joseph Rubin As Senior Vice President, Government Affairs In D.C. Office

NEW YORK, Sept. 6, 2017 /PRNewswire/ — MWWPR today announced that Joseph Rubin has joined the firm as Senior Vice President of Government Affairs and Public Relations. Rubin, who as a Republican strategist has a history and reputation of reaching across the aisle, will join Executive Vice President and Managing Director Amy K. Dacey, in the Washington, D.C. office.

Rubin, a seasoned, entrepreneurial executive and attorney with areas of expertise including financial services, technology, fintech, health care, and travel and entertainment, most recently served as Co-Chair of Arnall Golden Gregory’s Payment Systems Practice and Co-Chair of the Government Affairs Practice, and as a member of the Privacy, Technology and Health IT teams.

As a part of the MWWPR offering, Rubin will provide integrated campaign strategy and key insights into the intersection of policy, influencer engagement, stakeholder management and issues advocacy. With deep relationships on Capitol Hill and the current Administration, Rubin’s reputation with Issues Management and Public Policy will be an asset to current and future MWWPR clients.

“Whether it was his experience working for the U.S. Chamber of Commerce, with large companies, or working in the halls of Congress, Joe has been on the forefront of major shifts in policy and regulation and business and has successfully found strategic solutions for those challenges,” said Michael W. Kempner, Founder and CEO of MWWPR. “In this changing issue environment, organizations and major corporations need a partner to navigate ever changing waters. To drive success, you need experienced, connected thoughtful people to make sure the issues you care about have a voice and their stories are heard. Joe has navigated the issues space for decades and is uniquely prepared to best serve our internal and external stakeholders. Joe is an excellent addition to a strong DC team and MWWPR is looking forward to using his expertise across all practices and will be a true asset to our clients.”

In addition to his expertise in communications strategy and campaign development, Rubin has 23 years of experience working in Congress with the House Judiciary Committee, as a lobbyist and senior executive with several trade associations including the U.S. Chamber of Commerce, the Consumer Data Industry Association and as CEO of the Travel Technology Association. Rubin started and ran MasterCard’s Washington, D.C. office and directed federal, state and international government affairs for the brand.

“The DC office is looking forward to working with Joe and excited to have him apart of the Public Affairs and Issue Management team at MWWPR,” said Dacey, Managing Director of the Public Affairs and Issue Management Practice. “We are looking forward to applying his insights into our practice, as well as his years of well-developed influencer relationships and hands-on expertise that will benefit MWWPR clients.”

Selected as a “Lobby Leader” by Influence Magazine, Rubin led the post-9/11 coalition to enact Terrorism Insurance Legislation, as well as public policy and crisis management response for the credit reporting industry during the 2008 economic down-turn. He has also played central roles in the enactment of several federal laws, including: BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act), CAN SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing), Dodd-Frank Act, Class Action Reform Act, TREAD Act (Transportation Recall Enhancement, Accountability and Documentation), and Federal Improper Payments Coordination Act.

“I am incredibly excited to come on board with the team at MWWPR,” Rubin said. “After years of experience in Washington with public policy, regulatory and business issues, I feel I am positioned to bring that experience to the firm to make a difference in this ever-changing issue environment. MWWPR is the type of firm that I wanted to be a part of: Creative, strategic and with a strong presence in many differing practice areas. MWWPR is the best next step in my career path and I look forward to working with the team.”

About MWWPR

MWWPR® is one of the world’s top independent public relations agencies with a global footprint of eight offices across the US and Europe. MWWPR’s expertise spans Consumer Brands, Technology, Corporate Communications and Reputation Management, Public Affairs, Crisis Communications, LGBT, Entertainment, Sports & Luxury Lifestyle, and Health & Wellness. In 2016, MWWPR celebrated 30 years of providing strategic communications counsel and public relations support for its diverse client portfolio.

With dedicated insights, strategy, data and analytics, social media, creative and technology teams, MWWPR ensures that clients Matter More® to the stakeholders who matter most. MWWPR’s Matter More® approach has been recognized by numerous, top industry awards including “Company of the Year,” “PR Agency of the Year” and “Top Places to Work in PR,” in addition to numerous awards for client work.

To learn more about MWWPR, visit http://www.mww.com or follow us on social @MWW_PR.

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SOURCE MWWPR

Insurance coverage urged vs terrorism

The Insurance Commission on Wednesday urged the public to secure insurance against terrorist attacks following the carnage in Barcelona, Spain.

Insurance Commissioner Dennis Funa in a statement stressed the need to have insurance cover against terrorism.

“In the light of the continuing risk of terrorist attacks, it is important that the public is protected against losses and damages resulting from terrorist attacks,” Funa said.

There has been an upsurge in Filipinos traveling locally and abroad amid lower air fare from budget airlines.

“Since the 9/11 attack, terrorism insurance industry has grown exponentially. In the Philippine setting, however, it was only recently that a product has been approved which covers losses as a direct result of a terrorist act,” he said. 

The only company offering a terrorism insurance cover is FWD Life Insurance Company.

“While existing insurance products specifically exclude death and disability claims arising from terrorist attacks, FWD developed a product which specifically covers this risk,” the official said.

“As the first insurance product of its kind in the country, the product provides financial protection in the vent of death or serious disability such as total and irreversible loss of sight on both eyes or hearing on both ears, total and permanent inability to use one or both hand or one foot or both feet,” Funa said.

Funa said terrorism was one of the major social issues in our country.

“Considering that terrorism is an indiscriminate attack, any person is exposed to the risk of incurring loss to life, limbs and property. This leaves a significant gap between the likelihood of terrorist attack and the risk we are exposed to upon the happening of such attack,” he said.

Funa urged insurance companies to develop products that will afford protection against losses and damages as a result of acts of terrorism.

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Glasgow University insures art collection against terror attack

One of Scotland’s leading ­universities has awarded a contract to insure its vast art collection against a terrorist attack.

Glasgow University said it had appointed a new provider to offer cover for works by artists including Charles Rennie Mackintosh, Rembrandt and James McNeill Whistler.

The £200,000 contract also provides terrorism insurance for the university’s buildings, and for business interruption.

The university is home to the Hunterian Art Gallery, which includes one of the world’s most significant collections of Rennie Mackintosh’s work.

The gallery also features the Lady Shep-en-hor, a 2,500-year-old Egyptian mummy, and the “Bearsden shark”. Discovered in 1981, the fossilised shark is 330 million years old and thought to be the only one of its kind in existence.

It also holds a cast of a skull believed to be Robert the Bruce, which was used last year to create a digital reconstruction of what the king may have looked like.

A public notice posted ­earlier this week shows the university awarded the ­insurance contract to multinational firm Arthur J Gallagher & Co, which has an office in Edinburgh. The university had to find a firm which could provide terrorism cover after changing insurer in 2016.

Galleries including the Louvre in Paris and the Bardo National Museum in Tunisia have been the scene of terrorist attacks in recent years.

UK insurers stopped offering terrorism insurance on commercial policies following the IRA bombing of the Baltic Exchange in London in 1992. The building was later demolished to make way for the Gherkin.

Following the bombing, the government and insurance industry jointly established the Pool Reinsurance Company Ltd, known as Pool Re.

It is understood more than £600 million has been paid out to date in relation to 13 separate claims.

A spokesman for the university confirmed it had agreed a contract with a new provider.

He said: “The University of Glasgow is home to numerous works of fine art. We have recently appointed a new provider to insure these works, along with buildings, contents and business interruptions, as part of our annual renewal process, as we have done for many years.”

Lessons For Nigeria, As India Successfully Confronts Terrorism Risks

(Sundiata Post) – The clear lack of capacity for terrorism insurance in the Nigerian market and growing incidence of the risks, amidst the negative impact on business and the economy have left the local insurance market with no option but to learn from Indian market’s experience.

Does terrorism risks actually exist here?, the answer is yes, meaning that a lot of the terrorism risks emanating from Nigeria are taken offshore to the London market where the capacity exists.

What this implies is that Nigerian insurers are merely fronting for foreign reinsurers and collecting commissions, while the country continues to lose millions of dollars revenue in premium flight.

Analysts who spoke on the development, said since it has become obvious that Nigeria is hugely hit by terrorism risks, as a result of the activities of Boko Haram in the North-East, as well as political violence in many other parts of the country, and that forming a pool may be the way to go.

They also said that this has become important, as Nigerian risks may be rejected for high volatility, or accepted as high premium, giving that the rate of occurrence is rising.

A report released in July 2017 by the United States Department of State, disclosed that 75 per cent of deaths caused by terrorist attacks across the world, occurred in Nigeria, Iraq, Afghanistan, Syria; and Pakistan.
In 2015, Nigeria was ranked third of the 162 countries of the world that have been worst hit by terrorist attacks, according to Global Terrorism Index, having ranked fourth in 2014.
Savio Fernandes of the General Insurance Corporation of India (GIC) said Nigeria may need to emulate India, stating that India’s Terrorism Pool is doing very well with a lot of capacity.
Fernandes said after the terrorist attack on the International Trade Centre in the US, most insurance companies raised their rates, while some international reinsurers pooled back, which affected a lot of Indian businesses, “so we decided to strengthen our local pool”.
Fernandes, who on the GIC Team that partnered with Nigerian Reinsurance Corporation on capacity building for reinsurance offers in Nigeria recently, said it is something Nigeria should begin to think about.
Nick Sorgo, partner, Energy Division, JLT Specialty Ltd, London, who was looking at global market trends and lessons for Nigeria during a seminar organised by Wapic Insurance Plc in Lagos, said Nigeria is seen as relatively high risks by operators in the London market.
Sorgo said political risks from Nigeria, including terrorism, kidnapping and political violence, could make the country’s insurance rates not attractive to foreign insurers.
Terror insurance in India is growing bigger, with many public and private sector companies and landmark buildings and temples queing up to buy the cover, with the pool swelling to Rs 4,600 crore and growing at 25 percent annually.

The annual premium collection for this insurance cover in the country is about Rs 700 crore and this does not include stand-alone covers bought by big companies like Reliance or Essar and oil companies. The government-owned reinsurance company, GIC Re, is managing the pool in the country.

The 2008 Mumbai terror attacks saw the largest claim on the pool – with the total claim settled touching around Rs375crore.

GIC Re chairman, Ashok Kumar Roy said companies and institutions now realise the need for a terror cover after the 2008 attacks.
Until 2001, India had no terror pool. The country only had a cover for riots, strikes and malicious damage cover, called RSMD. After the World Trade Centre attacks and the Pentagon on September 9, 2001, global reinsurance companies withdrew cover for Indian companies, forcing domestic insurance companies to set up a terror pool. (BusinessDay)

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DMON

Insurance Commission cites need for coverage against terrorism

The Insurance Commission (IC) on Wednesday renewed its call on the need for insurance against acts of terrorism, following the Marawi seize and the recent attack in Spain by terrorists.

Insurance Commissioner Dennis B. Funa also urged the insurance industry to develop products to mitigate such risks, as he emphasized the need to have insurance cover against terrorism.

“In the light of the continuing risk of terrorist attacks, it is important that the public is protected against losses and damages resulting from terrorist attacks. Since the 9/11 attacks, terroris- insurance industry has grown exponentially. In the Philippine setting, however, it was only recently that a product has been approved which covers losses as a direct result of a terrorist act,” Funa said.

The IC chief added that, at present, the only company offering a terrorism insurance cover in the Philippines is FWD Life Insurance Corp. (FWD Life).

“While existing insurance products specifically exclude death and disability claims arising from terrorist attacks, FWD Life developed a product that specifically covers this risk,” he added.

Funa said the product developed by FWD Life is the first of its kind in the country, which provides a financial-protection component in the event of death or serious injury stemming from circumstances, such as a terrorist attack.

“Terrorism is one of the major social issues in our country. Considering that terrorism is an indiscriminate attack, any person is exposed to the risk of incurring loss to life, limbs and property. This leaves a significant gap between the likelihood of terrorist attack and the risk we are exposed to upon the happening of such attack,” he said.

In trying to address the gap, Funa urged insurance companies to develop products that will afford protection against losses and damages as a result of acts of terrorism.

“Considering that the Philippines is considered as high-risk country in terms of likelihood of terrorism attack, we encourage insurance companies to develop life and nonlife-insurance products that specifically cover losses and damages resulting from acts of terrorism,” Funa added.

Earlier in the month, the IC reported an 11.15-percent increase in premium income in the first six months of the year to P117.29 billion, due to the strong performance of the life, nonlife and mutual-benefit associations.

Funa said the growth was due to the sale of traditional and variable life-insurance products, which posted growth of 3.05 percent and 13.69 percent, respectively.

In the first half of 2016, the insurance sector reported a 9.11-percent decline in premium income to P105.52 billion, from P116.11 billion in the same period in 2015.The insurance industry’s total net worth stood P310.74 billion in the first six months this year, up 18.37 percent, from P262.51 billion in 2016.

Image Credits: AP