WTW has released its latest Terrorism Pool Index, providing insights into how different countries manage terrorism risks through insurance. This report, now in its sixth edition, was created in collaboration with the International Forum for Terrorism Risk Insurance Pools (IFTRIP) and highlights the evolving nature of national insurance programs.
The index offers a detailed comparison of terrorism reinsurance pools in over a dozen countries. It focuses on how these pools are adapting to the changing landscape of terrorism threats. Key features examined include the use of reinsurance, government guarantees, market access mechanisms, and recent claims activity. WTW emphasizes that these pools play a crucial role in providing coverage when private insurance options may not be sufficient.
Fergus Critchley, head of crisis management for North America at WTW, noted the ongoing threat of terrorism for both nations and businesses. He pointed out that in today’s unpredictable world, having robust insurance options is more important than ever. For instance, the Australian Reinsurance Pool Corporation was established after the September 11 attacks when commercial terrorism coverage became hard to find. It offers reinsurance for losses related to declared terrorist acts affecting commercial properties and business operations.
India has its own model, the IMTRIP, which operates without direct government funding. Instead, it pools contributions from non-life insurers. Meanwhile, Israel utilizes a tax-based system for state-funded compensation, and the United States has the Terrorism Risk Insurance Program (TRIP) that provides federal support for certified terrorism events.
The report also discusses how recent civil unrest has influenced insurance coverage. Traditional models have faced challenges due to incidents of strikes, riots, and civil commotion, prompting insurers to rethink their risk assessment strategies. WTW highlighted the importance of new analytical tools that help predict unrest by analyzing factors like political stability and social media trends. One such tool, the Synthetik SRCC Quantum Tool, uses geographic indicators to identify potential flashpoints for unrest.
Critchley emphasized that as civil unrest becomes more decentralized and coordinated through digital means, insurance risk models need to be updated. Understanding the potential financial impact of such unrest is crucial for effective risk management.
While the report primarily focuses on terrorism insurance, it also touches on broader business risks. Aon’s recent findings point to the interconnectedness of various risks, such as trade disruptions, technological changes, and climate stress. Aon CEO Greg Case stated that businesses need access to integrated data and analytics to effectively address these linked issues.
Overall, the 2025 Terrorism Pool Index sheds light on the evolving landscape of terrorism insurance and the growing importance of adapting to new risks in a rapidly changing world.