Terrorism

Event: Mumbai terrorist attacks, 2008
Location: Mumbai, India

Economic cost: Total business losses were around $100bn. Insured losses were $111m.

Description: On 26 November 2008 ten members of Lashkar-e-Taiba (“Soldiers of the Pure”) unleashed a 59-hour terrorist assault on multiple major public locations across Mumbai.

Damage: At least 164 people died and hundreds more were injured. Stock exchanges, commodity markets, money markets and many businesses stayed closed for days, and hotel occupancy rates fell by up to 25%.

Insight: Terrorism remains a priority for businesses in India. Mumbai suffered bombings in 2003 and 2006 and another attack in July 2011. The frequency of attack highlights the difficulty of forecasting and preventing these events, and underscores the need for insurers to help businesses assess and mitigate their exposure before discussing the possibilities of risk transfer.

Insurance solutions: The Lloyd's market offers cover in relation to Terrorism. Examples of this include but are not limited to: Property catastrophe reinsurance, terrorism reinsurance, insurance linked securities (including collateralised catastrophe reinsurance and catastrophe bonds), political violence, cyber attack, health insurance, workers' compensation and other commercial casualty covers, kidnap & ransom, contingency products, travel insurance, business interruption and contingent business interruption (both damage and non-damage).

Image: Fire engulfs the top floor of the Taj Mahal hotel in Mumbai during the terrorist attacks on 26 November 2008 (Getty Images)

Sources: Asia Economic Institute; Insurance Information Institute

The Mumbai attack showed that damage caused by terrorists and the state’s armed response is indistinguishable. From a client perspective third-party liability risks were highlighted, spurring them to re-evaluate policies and information required to protect and evacuate employees.

Andrew Page, Political Violence Underwriter, Beazley Group

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