TERRORISM COVER IN THE CONTEXT OF EXTRAORDINARY INSURANCE RISK
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Transcript of TERRORISM COVER IN THE CONTEXT OF EXTRAORDINARY INSURANCE RISK
TERRORISM COVER IN
THE CONTEXT OF EXTRAORDINARY
INSURANCE RISK
TERRORISM COVER
GENERAL FRAMEWORK
EXTRAORDINARY RISKSYSTEM OF COVER
GeologicalNATURAL RISKS Climatic
Terrorism RebellionPolitical-social SeditionRisks Uprising Popular Disturbance Actions by Armed
Services
- The risks covered are defined legally.
- Cover must be included in ordinary policies for personal accident insurance and certain sectors of property damage.
- Subsidiary action by the “Consorcio de Compensación de Seguros”.
- Compulsory surcharge collected by the entities issuing the ordinary policy.
- Scope: Spanish territory.
- Guarantee conditions: as in the ordinary policy (capital insured, etc.).
- For property, only direct material damage is indemnified.
BASIC FEATURES OF EXTRAORDINARYRISK COVER
LEGAL DEFINITIONS
TERRORISM
POPULAR DISTURBANCE
Any violent action intended to destabilise the establishedpolitical system, or to create fear and insecurity in the
social context in which it occurs.
Any group action intended to attack public peace, creating a disruption of order and causing
personal injury or property damage.
TERRORISM THE SITUATION FOLLOWING 11 SEPT.
AIR NAVIGATION: (Civil liability to non-passengers)
ECOFIN authorises support measures through reinsurance for the account of the State
SPAIN: Reinsurance for the account of the State, administered by the “Consorcio de Compensación de Seguros”
TERRORISM THE SITUATION FOLLOWING 11 SEPT.
TERRORISM REINSURANCE FOR LOST PROFIT, BY THE“CONSORCIO DE COMPENSACIÓN DE SEGUROS”
THE CCS-UNESPA AGREEMENT 31-1-2002
COVER FOR ALL POLICIES, ANDIN ALL CATEGORIES
SUBSIDIARITY
SOLIDARITY MUTUALISATION
COMPENSATION
GEOGRAPHICAL
BETWEEN RISKS
TIMING
COLLABORATION
EXTRAORDINARY RISKS
COVER FUNDAMENTALS
PRINCIPLES
EXTRAORDINARY RISKS
INDEMNIFICATIONREQUISITES
TO HOLDDAMAGE
INSURANCE IN CERTAINCLASSES
COMPULSORY INCLUSION OF
EXTRAORDINARYRISKS
PAYMENT OFTHE
COMPULSORYSURCHARGE
FIRES AND NATURAL FORCES,MOTOR VEHICLES (Not Civil Liability),
RAILVEHICLES,ROBBERY, BROKEN WINDOWS, BREAKDOWN OF MACHINERY,
ELECTRONIC EQUIPMENT AND COMPUTERS, FINISHED CIVIL ENGINEERING WORK,
PERSONAL ACCIDENTS
CLASSES ACCESSIBLE TO THE “CONSORCIO”
EXTRAORDINARY RISKS
INSURERPRIVATE COMPANY:
If wished, Extraordinary Risks may be covered:- Along with ordinary risk cover.
- In a separate policy.
EXTRAORDINARY RISKS
INSURER
THE “CONSORCIO DE COMPENSACIÓN DESEGUROS”:Covered when:
- The private company gives no explicit cover. (SUBSIDIARITY)
- The private company does provide cover, but cannot meet its indemnification obligations (bankruptcy, temporary receivership, CLEA)
(GUARANTEE FUND)
THE “CONSORCIO” DOES NOT DIRECTLY UNDERWRITE THE COVER
EXTRAORDINARY RISKS
CHARACTERISTICS OF COVER
• LEGALLY DEFINED
• QUALITATIVE AND NOT QUANTITATIVE: Not conditioned by territorial extension, by the number of affected parties, or extensive damage.
• AUTOMATIC: Official declaration as a catastrophic area is not required.
EXTRAORDINARY RISKS
RISKS COVERED
NATURAL PHENOMENA
EARTHQUAKESEAQUAKE
FLOODVOLCANIC ERUPTION
ATYPICAL CYCLONIC STORMFALLING SIDEREAL BODIES
PHENOMENA WITHPOLITICAL-SOCIAL EFFECTS
TERRORISMREBELLION
SEDITIONUPRISING
POPULAR DISTURBANCEACTION BY THE ARMED FORCES
EXTRAORDINARY RISKS
DAMAGE DIRECTMATERIALDAMAGE
INDEMNIFIABLELOSSES
EXPENSES
Salvage
Demolition and clearing
EXTRAORDINARY RISKS
SCOPE OFCOVER
RISKS COVERED: Extraordinary Risks
SUM INSURED : That of the ordinary insurance
PROPERTY AND PERSONS COVERED: those under the ordinary cover
TERMS INCLUDED OPTIONALLYIncluded in the ordinary cover: first risks,indemnification limits.
Application of the PROPORTIONAL RULE
EXCLUSION PERIOD 30 days following the effective date of the policy
INDEMNIFICATIONFRANCHISE
(Property Damage)
GENERAL: 10% loss
LARGE CAPITALS: 15%
NO> 1 % of the insured sum
< 150.25 Euros
• OCCURRENCE
• DIRECT C.C.S. PAYMENT TO THE INSURED
Verification• APPRAISAL Occurrence
Cause covered
• CLAIMCompanies
C.C.S.
EXTRAORDINARY RISKS
CLAIM MANAGEMENT
THE “CONSORCIO DE COMPENSACIÓN DE SEGUROS” EXTRAORDINARY RISKS: COVER FOR TERRORISM
AND POPULAR DISTURBANCE
PROPERTY DAMAGE
- CONSUMPTION OF PREMIUM. ALL CAUSES
- AMOUNTS PAID ACCORDING TO CAUSES
- AMOUNTS PAID FOR TERRORISM AND POPULAR DISTURBANCE,
ALL CAUSES
- AMOUNTS PAID FOR TERRORISM AND POPULAR DISTURBANCE
BY THE YEAR OF LOSS
- AMOUNTS PAID FOR TERRORISM AND POPULAR DISTURBANCE
ACCORDING TO RISK TYPE
THE “CONSORCIO DE COMPENSACIÓN DE SEGUROS” EXTRAORDINARY RISKS: COVER FOR TERRORISM
AND POPULAR DISTURBANCE
DAMAGE TO PERSONS
- AMOUNTS PAID FOR TERRORISM AND POPULAR DISTURBANCE,
ALL CAUSES
- AMOUNTS PAID FOR TERRORISM AND POPULAR DISTURBANCE BY
THE YEAR OF LOSS
- NUMBER OF VICTIMS OF TERRORISM AND POPULAR DISTURBANCE
THE “CONSORCIO DE COMPENSACIÓN DE SEGUROS” EXTRAORDINARY RISKS: COVER FOR TERRORISM
AND POPULAR DISTURBANCE
THE MOST COSTLY INDIVIDUAL LOSS CAUSED BY
TERRORISM
Note:
- All figures in Euros
- All figures updated in Euros to 31-12-2001
PROPERTY AND PERSONAL LOSS
- AMOUNTS PAID ACCORDING TO CAUSES
EXTRAORDINARY RISKS: PREMIUM CONSUMPTION, PROPERTY DAMAGE SERIES 1971 - 2001
ALL CAUSES
EXTRAORDINARY RISKS Updated Premiums and Loss Rate
0500.000.000
1.000.000.0001.500.000.0002.000.000.0002.500.000.000
3.000.000.000
1971 - 1980 1981 - 1990 1991 - 2000 2001
SERIESPremiums Loss Rate
Decade of Updatet Updated Premiumocurrence premiums loss rate consumption
1971 - 1980 838.760.747 694.813.760 82,84
1981 - 1990 1.253.489.787 1.821.943.058 145,35
1991 - 2000 2.565.364.367 998.200.432 38,91
2001 349.915.399 105.185.797 30,06
TOTAL 5.007.530.301 3.620.143.047 72,29
Update to 31-12-01
Figures in euros
EUROS
EXTRAORDINARY RISKS – PROPERTY DAMAGE SERIES 1971 – 2001
(*) Includes former cover for rain, hail, snow and hurricance. (**) Unclassified loss rate for the first years in the series.
UPDATEDC A U S E AMOUNTS %
PAID
Flood 2.257.575.150 62,4
Earthquake 16.568.317 0,5
Atypical ciclonic storm(*) 561.584.095 15,5
Falling meteorites 74.714 0,0
Terrorism 278.642.256 7,7
Uprising 813.121 0,0
Popular disturbance 48.355.630 1,3
Actions by the Armed Services 1.049.738 0,0
Unclassified (**) 455.480.027 12,6
TOTAL 3.620.143.047 100
Update to 31.12.01Figures in Euros
EXTRAORDINARY RISKS: PROPERTY DAMAGESERIES 1971 - 2001
TERRORISM % OF
TERRORISM + ALL
POPULAR DISTURBANCE CAUSES
3.620.143.047 278.642.256 48.355.630 326.997.886 9,03
Update to 31.12.01Figures in Euros
POPULAR DISTURBANCE
ALL CAUSES
UPDATED AMOUNTS PAID
EXTRAORDINARY RISKSProperty Damage
Loss Rate by Cause
9%
91%
Terrorism +Popular Disturbance
Other causes
EXTRAORDINARY RISKS – PROPERTY DAMAGE. SERIES 1971 - 2001
SUMS PAID UPDATED, BY YEAR OF OCCURRENCE
YEAR OF POPULAR TERRORISM + OCURRENCE DISTURBANCE POPULAR DISTURBANCE
1971 0 0 01972 21.631 0 21.6311973 173.249 0 173.2491974 185.775 0 185.7751975 1.118.677 0 1.118.6771976 2.592.162 0 2.592.1621977 13.465.701 691 13.466.3931978 10.356.143 1.749 10.357.8921979 8.641.568 0 8.641.5681980 7.621.770 17.661 7.639.4311981 3.405.690 32.156 3.437.8461982 46.462.418 2.333 46.464.7521983 11.413.651 591 11.414.2421984 9.471.203 9.573 9.480.7761985 6.097.575 642.956 6.740.5321986 10.047.119 707.091 10.754.2091987 21.864.491 216.123 22.080.6141988 6.848.266 857.208 7.705.4741989 2.805.708 5.345.626 8.151.3341990 12.550.008 1.796.646 14.346.6541991 9.855.178 3.395.794 13.250.9721992 8.423.292 2.196.168 10.619.4611993 5.756.729 1.228.595 6.985.3241994 2.837.704 2.404.540 5.242.2441995 7.300.142 4.598.125 11.898.2671996 11.580.085 7.081.937 18.662.0221997 14.674.398 5.791.791 20.466.1891998 4.922.534 3.242.388 8.164.9221999 5.380.311 1.057.371 6.437.6822000 15.336.683 5.621.523 20.958.2062001 17.432.394 2.106.991 19.539.385
TOTAL 278.642.256 48.355.630 326.997.886Update to 31.12.01Figures in Euros
TERRORISM
EXTRAORDINARY RISKS: PROPERTY Amounts paid (updated),
Terrorism and Popular Disturbance
0
10
20
30
40
50
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
Mil
lio
ns
of
Eu
ros
YEARS
EUROS
EXTRAORDINARY RISKS – PROPERTY DAMAGE SERIES 1994 – 2001
UPDATED SUMS PAID, DISTRIBUTED BY RISK TYPECAUSE OF LOSS: TERRORISM AND POPULAR DISTURBANCE
UPDATEDTYPE OF RISK AMOUNTS %
PAID
Homes and Communities 22.386.214 20,1
Offices 29.540.432 26,5
Commerce and Other, Simple 32.810.874 29,5
Industrial 8.407.226 7,5
Automobiles 17.528.201 15,7
Civil Engineering Work 695.972 0,6
TOTAL 111.368.919 100
Update to 31.12.01Figures in Euros
UPDATED AMOUNTS PAID SERIES: 1994 - 2001. Percentage Distribution
20%
27%
28%
8%
16%1%
Homes and Communities
Offices
Commerce and Other, Simple
Industrial
Automobiles
Civil Engineering Work
EXTRAORDINARY RISKS: PERSONAL DAMAGE .SERIES 1987 - 2001
TERRORISM % OF
TERRORISM + ALL
POPULAR DISTURBANCE CAUSES
24.153.045 21.415.965 131.142 21.547.107 89,21
Update to 31.12.01Figures in Euros
POPULAR DISTURBANCE
ALL CAUSES
UPDATED AMOUNTS PAID
EXTRAORDINARY RISKS: Personal Damage Loss Rate by Causes
10,8%
89,2%
Terrorism + PopularDisturbance
Other Causes
EXTRAORDINARY DAMAGE – PERSONAL DAMAGESERIES 1987 - 2001
UPDATED AMOUNTS BY YEAR OF OCCURRENCE
EXTRAORDINARY RISKS: PERSONS Amounts paid (updated),
Terrorism and Popular Disturbance
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
YEARS
YEAR OF POPULAR TERRORISM +
OCURRENCE DISTURBANCE POPULAR DISTURBANCE
1987 1.746.625 0 1.746.625
1988 935.435 9.288 944.723
1989 1.501.823 47.912 1.549.735
1990 1.151.608 0 1.151.608
1991 2.338.821 34.603 2.373.424
1992 2.467.980 21.436 2.489.416
1993 954.435 0 954.435
1994 848.248 0 848.248
1995 2.506.699 0 2.506.699
1996 1.049.206 17.903 1.067.109
1997 748.814 0 748.814
1998 895.252 0 895.252
1999 0 0 0
2000 3.201.389 0 3.201.389
2001 1.069.631 0 1.069.631TOTAL 21.415.965 131.142 21.547.107
Update to 31.12.01Figures in Euros
TERRORISM
EUROS
EXTRAORDINARY RISKS – PERSONAL DAMAGE SERIES 1994 - 2001
NUMBER OF VICTIMS BY YEAR OF OCCURRENCE OF LOSS CAUSE OF LOSS: TERRORISM AND POPULAR DISTURBANCE
YEAR POPULAR TERRORISM +
OCURRENCE DISTURBANCE POPULAR DISTURBANCE
1994 29 0 29
1995 32 0 32
1996 15 2 17
1997 15 0 15
1998 9 0 9
1999 0 0 0
2000 32 0 32
2001 14 0 14
TOTAL 146 2 148
TERRORISMNo. OF VICTIMS
Terrorism and Popular Disturbance
15
9
0
14
29
17
3232
0
5
10
15
20
25
30
35
40
1994 1995 1996 1997 1998 1999 2000 2001
DATE: 18 April 1982
PLACE: Madrid
UPDATED SUMS PAID: 37.331.580 Euros
INSURED: Telefónica, S.A.
THE MOST COSTLY INDIVIDUAL CLAIM CAUSED BY TERRORISM
EXTRAORDINARY RISKS – PROPERTY AND PERSONAL DAMAGE - SERIES 1987 - 2001
UPDATED C A U S E AMOUNTS %
PAID
Food 1.493.339.427 85,45
Earthquake 16.551.204 0,95
Atypical Cyclonic Storm 19.743.330 1,13
Falling meteorites 74.714 0,00
Terrorism 168.983.889 9,67
Uprising 813.121 0,05
Popular Disturbance 47.071.969 2,69
Actions of the Armed Services 1.061.969 0,06
TOTAL 1.747.639.622 100Update to 31.12.01Figures in Euros
EXTRAORDINARY RISKS: Property and Personal Damage
Loss rate by Causes
85,4
9,7
2,2
2,7Flood
Terrorism
PopularDisturbance
Rest