Canada shows increased interest in stand-alone terrorism cover

A combination of increased capacity, more predictable premium rates and innovative program design is creating steady growth in the take up of stand-alone terrorism insurance, according to Aon’s Stand-alone Terrorism Market Update.

Aon said there is an increasing interest in terrorism cover in Canada, Latin America, Eastern Europe, the United Kingdom, Germany, Southern Europe, India and the Far East.

Also, “the ongoing bombardment of television images from Iraq, intelligence about foiled attacks and frequent evidence emerging about the intentions and ongoing capabilities of Islamic terrorists has increased awareness among buyers and further fuelled demand,” says an Aon release announcing the report.

“Most existing buyers renew, and there is a steady stream of new buyers of the stand-alone product,” said Will Farmer, a director in Aon’s crisis management division and author of the report.

The Aon report says most buyers would prefer their property ‘all-risks’ insurers to cover full terrorism, and use the stand-alone terrorism market only as a last resort.

Nevertheless, “the reticence of property insurers to soften their position while the threat of more catastrophic terrorism losses remain” suggests the stand-alone market will continue to have an important role to play in providing cover for terrorism, the report added.