What does rising demand for terrorism coverage mean for brokers?

What does rising demand for terrorism coverage mean for brokers?

What does rising demand for terrorism coverage mean for brokers? by Lucy Hook

New research reveals that terrorism coverage is increasingly at the forefront of clients’ minds, as terrorist attacks continue to occur around the world.

A recent study from travel insurance comparison site Squaremouth found a 127% increase in travellers searching specifically for terrorism coverage when purchasing a policy, compared to the same period last year – a significant hike.

The research also found that the number of travellers who used Squaremouth’s terrorism filter to buy policies for Germany, Italy and Spain had more than doubled compared to the same period in 2015.

The statistics indicate a growing concern among consumers about insuring themselves against the risk of terrorism – but what does this mean for brokers?

Insurance Business spoke exclusively to insurer Sutton Special Risk to find out more about the increase in demand, and what messages brokers should convey to clients about terrorism cover.

“Given the uncertainty of the world we live in today, we are seeing more and more travellers purchase war and terrorism coverage as an extra layer of protection,” Chris Carr, manager of special risk underwriting said.

Premiums are fluid, and the rates change depending on the country and the nature of the risk – which constantly fluctuates.
Despite this, premiums provide substantial coverage at a reasonable additional cost, even as acts of terrorism become more and more frequent, Carr said.

While typically countries in the Middle East still have the highest premiums, more and more travellers are purchasing coverage for countries which used to be classified as extremely safe and with a minimal threat of terrorism, Carr explained.

This is perhaps due to the spate of major terrorist attacks that have occurred in Europe in recent months.

Sutton’s offering includes war and terrorism coverage for major medical, disability and accidental death and dismemberment benefits, which Carr said provides travelers and their family members with coverage for medical expenses, a disability benefit, or an accidental death benefit in the event they are injured, disabled, or killed as a result of an act of war or terrorism.

The key message to clients, according to Carr, is that coverage offers some assurance against an unsteady environment.
“Brokers and insurers should advise their clients that there are many unknown factors in the world we live in today,” he said.
“Terrorism coverage can provide travellers with peace of mind knowing that in the event a catastrophic act of terrorism occurs, they will have the necessary insurance coverage in place.”

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