The war risk insurance market has experienced exponential growth since the September 11 attacks in 2001. This specialized insurance sector also provides cover against terrorism. While general household insurance does not cover conflict damage, individuals can take out war risk insurance cover, which is more commonly bought by companies to insure their operations, facilities, and staff in high-risk countries and regions.
War risk cover is organized into seven different severities of conflict, ranging from sabotage and terrorism to civil and interstate war. The war risk sector operates primarily in London, with the City of London being the center of the international war risk insurance market. The insurance policies can cover various scenarios such as kidnappings, ransoms, serious injuries, and dealing with an “active assailant” situation.
Premiums for war risk insurance fluctuate based on the country’s risk level and can range from 0.5% to 2% of the total cover in countries with ongoing conflict. In stable Gulf states, the premiums are much lower, ranging from 0.025% to 0.05% of the total amount covered. The profitability of war risk insurance can be contrasted with the car insurance sector, where for every £1 of premiums, car insurers pay back almost £1.05 in claims, making the car insurance sector relatively less profitable compared to war risk insurance.
Source: https://www.bbc.com/news/articles/c15kzjkqpqeo?at_medium=RSS&at_campaign=rss
