Although not new, terrorism insurance was something that i was unaware of. It fits in the the category of general insurance in the sense that we can have multiple claims and doesn’t form part of the traditional life insurance. The product basically covers claims which results from acts of terrorism and benefits ranges from damages/loss of properly or life. Terrorism insurance is quite different form the typical insurances that we come across because the characteristics associated with the risks are different. As mentioned in the article “Terrorism and risk insurance”, the ability to model the frequency and the size of the claim is difficult as terrorism acts are intentional. It is also worthy to pay attention to how the 9/11 terrorism attack on the world trade center had an impact on how terrorism insurance works and on the risks factors. In december 2005, the USA government passed on the Terrorism Risk Insurance (Extention ) Acts (TRIEA) which increased the portion that insurers had to cover in case of terrorism attacks. This undoubtedly has some direct effect on the modelling of the risk and the premium to be paid. The South African Special Risk Insurance Association (SASRIA) and AIG (American International Group) South Africa are amongst the few that offers terrorism insurance cover. The links to these insurance covers and the two articles are given below. The first one “A look at terrorism Insurance” gives a basic introduction about the insurance and the second one, “Terrorism Risk and insurance” gives a more detailed explanation of the industry and its environment. The other two links pertains to the two south african insurances that offers a cover thats related to terrorism.
Just for fun:
Funny Quotes from insurance claims:
“When I saw I could not avoid a collision I stepped on the gas and crashed into the other car.”