It is an obvious fact that our counter terrorism efforts must respond accordingly and so must our insurances.
Terrorism is often talked about in sensationalist ways as if it is an entirely new challenge the world is facing. That is, of course, a fallacy. It’s understandable of course; years can go by with little or no incidents either globally, or on home soil, depending on your perspective. The shock when it does happen always makes it feel new.
When I was growing up, terrorism was (according to my perception and memory) a ‘Spanish/Basque Separatist problem’ as well as a British one. It was all about the IRA and ETA. There were other incidents around the world, but as an ‘x’ year old, these were the ones I was aware of. They were the incidents the media had real access to and the ones which were reported most frequently. Media coverage and its role in perception of terrorism is for another article perhaps and the concepts and impact of ‘distance’ and ‘detachment’ is another discussion altogether, and again, perhaps one for another article. Nevertheless, the sometimes uncomfortable proximity of the IRA attacks served to bring the issue in to focus for many people, being of course, a little closer to home.
This is just a snapshot in time, viewed through the time-fogged lenses of a boy growing up in Kent who didn’t take a keen interest at the time. Look at a similar snapshot now, and its completely different… but not so different; everything changes and nothing changes. Terrorism, whichever strict definition you favour, has existed in various forms for many generations. The threats we face from terrorism, regardless of the underlying cause or goal, have morphed and evolved and it has thus been the ongoing challenge of counter-terrorism efforts and insurers to understand those threats and to react to the risk in a measured and appropriate way.
Who does this affect and why should we care?
This means a variety of things depending on who you are and what your responsibilities and interests are. For the traveller, it means considering the implications in terms of the environment you are travelling to. For a business owner, open to the public, it might mean considering any measures that might be taken to keep your staff and patrons safe. For infrastructure managers, it will likely mean that disaster recovery plans and coping mechanisms and emergency state procedures need to be put in place in respect of a terrorism incident. From an emergency services and indeed intelligence point of view, the interest and implications are obvious.
Where they are perhaps not so obvious are the interests of insurance buyers and the responsibilities of insurance professionals, especially those client facing, giving advice.
An overlooked or neglected gap in advice and coverage?
Whilst the threat of terrorism is considered and appreciated by many types of people and organisations directly potentially affected by terrorism, it is often demonstrably inadequately understood, or at least inadequately explained by insurance professionals which by extension is inadequately understood and appreciated by the clients they advise.
With the rise of aggregator websites, increasingly transactional platforms and commoditised product and with real advice ‘disappearing’ quickly from certain sectors of the UK insurance market, where brokers are used, they are valued for the service and advice they can provide. Otherwise, why bother? As with all financial services, it is the intangibles which count. It’s the advice, the service, the knowledge and the insight which differentiates brokers. If the broker is not informed and is not in a position to offer ‘best advice’ then why use them as opposed to another broker? Or not bother with a broker at all?
What chance do insurance buyers have if their brokers do not fully appreciate and understand the threat of terrorism and the insurance products available? How can the client make an informed purchase when broker advice is either missing or lacking clarity?
There is real value of expert advice in an increasingly commoditised and transactional field The threat of terrorism is something that should be considered along with other more immediately obvious and standard, traditional perils. It should not simply be ignored. Even where the end decision is not to purchase the cover; it’s imperative that the decision is made in a conscious fashion. It is no longer sufficient to simply assume that the cover is not required, and where it is, there are flexible options outside of the easy, default route. By taking the time to consider this risk and the nature of the cover required and by engaging with the experts at TriStar Special Risks Ltd, brokers can offer a proactive and flexible solution.
There is an opportunity for the informed and proactive broker to capitalise in what is currently an under-served market in terms of real broker advice. TriStar Special Risks Ltd invites enterprising brokers to take advantage of our product, service and underwriting expertise to provide better advice, protection and solutions for your clients.
James Woolerton, BA (Hons) ACII Managing Director TriStar Special Risks Limited – The Specialists in Terrorism Insurance Solutions
