Two leading London underwriters in the political violence and terrorism (PVT) insurance market say that the specialty line is coming of age after the dramatic events of the last few years, not least the war in Ukraine.
Awareness among many risk and insurance managers of the potential value of the coverage and how it works, however, remains limited and more work is needed from all market players to boosts knowledge.
But demand is rising for this specialist line of business that was borne out of the US terror attacks in 2001. There are plenty of carriers in the London market prepared to write the risk and seek solutions to often complex customer needs, said the underwriters during Commercial Risk’s recent event focused on this market and co-hosted by leading specialist London broker BPL Global.
Joe Pearman, senior political violence underwriter at The Hartford, and Guy Burrows, senior underwriter of terrorism and political violence at London specialty insurer Inigo, agreed that this market needs careful underwriting because of the potentially catastrophic aggregations and recent tight reinsurance markets.
But events such as the war in Ukraine have really underlined the value of the cover for risk and insurance managers. The market is also being helped by improvements in the quality and quantity of data that can be gathered and used for risk analysis and ultimately pricing.
“Yes, demand is up and yes I think the market can meet this,” said Burrows when asked by discussion host Charlie Grace, assistant director at specialist credit and political risk broker BPL Global. “There is expert knowledge and expertise but probably what is needed are larger underwriting teams to deal with the volume. The good news is that we are all hiring and bringing new talent into the market, which is fantastic,” he added.
Pearman agreed with his fellow underwriter. “The last 12 to 24 months have really highlighted the importance of what we do and the heightened individual needs of customers in this often complex and fast-evolving environment. This period has actually been the shake-up that this sector needed. Can we handle this challenge? Yes, I think we can here in London,” he said.
The two underwriters said that high-quality data, submissions, analysis and exposure control will be key to the continued growth and success of this business line.
“As Joe stressed, this is a market that is characterised by not really knowing what comes next. For this reason, it is critical to build balanced portfolios,” said Burrows.
*BPL Global is an independent broker specialising exclusively in credit and political risk insurance (CPRI) and political violence and terrorism (PVT) cover for multinational corporations and cedants. BPL Global says its greatest strength is the expertise and experience of its people, all of whom are committed to putting clients’ needs first. In 2023 BPL Global celebrates its 40th anniversary.