Page 39 - Insurance Times July 2019

Global Terrorism world is struggling to cope with the results of the climate
changes and the rates of the re-insurance premium have
Climate Change and
gone north.
Global Ageing.
The global climatic events like the Typhoon Mireille (Japan),
Each one of the above mentioned factors could lead to a
Hurricane Charley (US, Cayman Islands, Cuba etc),
fall out where losses could be huge and large. Accumulation
Hurricanes Wilma and Rita, the Tsunami and nearer home
of such losses is what is the cause of concern for the
the Kosi Floods (2008), the Bhuj Earthquake (2001), Cyclone
insurers and the reinsurers.
Fani (2019), Kashmir Floods etc have all brought to the fore
that there is a huge gap between the insured and actual
To elucidate the first point related to Global Terrorism, the
losses that we witnessed.
attention should be drawn on the loss of property and lives
that happened due to the crash of the Twin Towers at the
The Global Underinsurance Report of Lloyds Way
World Trade Centre, New York City. This can be best
Back in 2012 had Pointed Out the Following:
explained through the diagram below:
Loss Distribution By Type of Insurance From
Country Insured proportion Uninsured losses
September 11 Terrorist Attack ($ 2015 billions)
of loss ($US m)
(2004-2011) (2004-2011)*
United Kingdom 66.8% $2,391
New Zealand 63.5% $19,432
Canada 55.3% $1,323
Australia 49.9% $9,982
United States 42.7% $148,580
Spain 31.4% $603

Turkey 18.6% $2,300
Japan 16.6% $201,676
India 15.7% $7,856
Indonesia 8.6% $5,785
(1) Adjusted to 2015 dollars by the Insurance Information Colombia 3.2% $1,667
Institute using the U.S. Department of Labor BLS China 1.4% $208,003
Calculator.
CEBR Report for Lloyd's
(2) Loss total does not include March 2010 New York City
settlement of up to $657.5 million to compensate
approximately 10,000 Ground Zero workers or any
subsequent settlements.
Source: Insurance Information Institute.

The idea behind showing this loss distribution is to bring to
fore what types of insurance policies would be needed in
this type of a catastrophic loss. Our Indian experience is not
so different when it comes to the attack on the Taj Hotel,
Mumbai or the attack on the Parliament.

The second challenge viz the impact of the global climatic
changes has hit everyone to an extent, where the insurance

The Insurance Times, July 2019 39