Best’s Review – excellent article on hotel terrorism insurance in the wake of the Sri Lanka attacks, plus 3 respectful points of dissent

Best’s Review published a timely terrorism insurance article written by the talented Iris Lai in its July issue titled, “Continuing Exposure: Sri Lanka bombings call for revisiting terrorism and political risk management, market watchers say.” Below is a summary of the article’s pertinent data points, and takeaways follow. The Easter bombings in Sri Lanka have caused businesses in Asia to focus extra attention on terrorism risk management. Underwriters are expected to review their exposure to hotels and the risks posed to them by terrorism. Regarding Asia, no region is safe from terrorism, even places like Hong Kong and Singapore, said insurance experts. Hotels continue to be priority targets of terrorists. In Sri Lanka, there has been a surge of demand from uninsured properties to secure terrorism insurance. Also in Sri Lanka, the National Insurance Trust Fund is covering $5.8 million in insured damages … Continue reading

28 April 2019, Insurers respond to hotel bombings in Sri Lanka, with Matt Wills, Senior Insurance Advisor

Insurers are making initial moves to analyze damage done and calculate payouts at three of the four hotels that were bombed on 21 April, Easter Sunday in Colombo. (Three churches were also bombed.) The fourth hotel is a guest house, and so far, there has been no mention of its insurance claims status. Regarding the Shangri-La Hotel Colombo, The Sunday Times reported that Sri Lanka-based Ceylinco General Insurance, along with Chubb – the insurers who cover Shangri-La hotels in Sri Lanka and the Maldives – went to the hotel within a few hours of the initial attacks to begin the claims process. Then, on 22 April, adjusters visited the hotel for a more comprehensive site inspection. Later, on 25 April, Ceylinco paid a US $1 million advance to the Shangri La so it could begin cleanup, temporary repairs, and tend to related crisis … Continue reading

Adjua Fisher for Risk and Insurance magazine discusses active shooter insurance – relevant for hotels

Adjua Fisher, on 1 March 2019, wrote the informative article, “Is Active Shooter Insurance Becoming a Risk Management Necessity?” for Risk and Insurance. In the article, Fisher asserts that, out of 500 workplace homicides in 2016 in the US, close to 80 % resulted from shootings. Fisher goes on to say that, “Active shooter insurance, also known as ‘active assailant insurance,’ is a type of gap coverage used to supplement general liability insurance, covering unexpected expenses stemming from a shooting, like funeral costs, death benefits and more.” Such insurance is becoming more common because of the above cited statistics. Muir Analytics collects hotel violence data from all over the world, and it has multitudes of hotel shootings in its database ranging from Southeast Asia, the Middle East, Europe, and Latin America. The US, however, has more hotel shootings than any other country, all of which are … Continue reading

13 February 2019, post Nairobi Dusit terror attack exclusive interview with Mr. Souvik Banerjea, Managing Director, Continental Re, Nairobi Subsidiary (bio below)

In the wake of the 15 January 2019 al Shabaab terror attack on the dusitD2 hotel and business complex where 21 people died and at least 30 were wounded, Muir Analytics wanted to know more about the terrorism insurance market in Kenya. We reached out to Mr. Souvik Banerjea, Managing Director of Continental Re in Nairobi, for his expert insights. Here’s what he told us in this exclusive interview. Muir Analytics: How do hotels and resorts get terrorism insurance in Kenya? What’s the typical route? Mr. Banerjea: The insurance market in Kenya is broker-driven. Typically, the client will approach their insurance broker, who in turn will approach one or more insurance companies for the same. Again, the insurers shall usually approach a reinsurer who will provide the actual terms, and we go all the way down back to the client. Muir Analytics: And do these terrorism policies … Continue reading

28 November 2017, Bloomberg article speculates Mandalay Bay/Vegas concert massacre might cost over $1 billion in insurance payouts

Bloomberg writers Hannah Levitt and Sonali Basak penned the article, “Las Vegas Massacre Could Cost Insurers More Than $1 Billion,” on 10 November. To date, the exactitudes of insurance payouts, the companies involved, what policies did and did not cover, etc., are not forthcoming because it is too early in this sure-to-be contentious liabilities case. Nevertheless, Levitt and Basak offer insight into some of the pressing issues at stake. Highlights of the article are as follows: A multitude of lawsuits could drive the insurance bill for the Las Vegas massacre (called a “man-made disaster” by the insurance industry) to over $1 billion, and that they might continue for years The insurance sector this year (2017) has had to deal with a series of massive payouts, perhaps $130 billion, because of hurricanes, earthquakes, and wildfires, [and, therefore, it is likely to resist additional payouts…commentary here by … Continue reading

10 September 2017, Insurance AND legal issues impact Regency Hotel Dublin over Feb 2016 gangster attack

The assassination of Irish gangster David Byrne at the Regency Hotel Dublin on 5 February 2016 provides a textbook case study of hotel vs. insurance company wrangling over policies and payouts. The hotel suffered only slight physical damage from the attack, but business losses mounted, and the insurance company did not want to issue a payout. In the end, all parties lost out. The lesson here is that clear and decisive policies – especially regarding violence against hotels – can improve the insurer-client relationship, and justifiable payouts do not have to drown in a sea of litigation. The Regency Hotel Dublin (aka, The Regency Hotel) is a three-star, independent, family-run hotel. Its parent company is Regan Development Ltd. The hotel has a reputation as a lively, warm, and bright gathering place for sporting events, weddings, and other celebrations. The Regency website says it has … Continue reading

10 October 2016, UK Pool Re announces international terrorism risk pool forum

On 10 October, the Insurance Journal wrote that the UK’s government-backed Pool Re, which covers commercial property losses from terror attacks, had launched the International Forum of Terrorism Risk Re/Insurance Pools (IFTRIP.) IFTRIP is designed to build relationships and increase cooperation amongst other national pool res around the world. It was started in response to the dramatic increase in global terrorism. The Insurance Journal reported the following key points about IFTRIP: IFTRIP was formally launched on 10 October 2016 at the 2nd Annual Global Terrorism Risk Insurance Congress, hosted by the Australian Reinsurance Pool Corporation (ARPC,) Australia’s pool re, in Canberra The overarching goals of IFTRIP are to: 1) improve how the insurance sector reacts to terrorism, and 2) improve how nations protect their respective economies The presidency of IFTRIP will revolve on a yearly basis Francois Vilnet, Vice President of France’s pool … Continue reading

5 January 2016, Building premiums under review post Dubai hotel/apartment fire; might impact terrorism insurance

Following the major fire at The Address Downtown Dubai on New Year’s Eve, real estate community premiums in UAE are under review, and they might rise, reports The National. Two other 2015 skyscraper fires in Dubai are contributing to this possibility: one is the Regal office tower fire that happened in November, and the other is the Torch Tower fire that happened in February. None of these fires were reportedly suspicious or terrorist related, though three major building fires in a single year in Dubai do seem odd. Buildings with aluminum cladding panels, says Mohammed Hesham, Operations Manager of Capital Shield Insurance Brokers, is one reason for potential premium increases. “Cladding” refers to the outside surface of buildings. If the materials used for cladding are flammable, then the risk of damage and loss of life from accidental fire, arson, or terrorist bombing increases … Continue reading

14 July 2014, Commercial property coverage premiums come down – including terrorism coverage

Nancy Crotti recently wrote an illuminating article on the decrease of commercial property coverage premiums for Commercial Property Executive. This included terrorism coverage. Titled, Buyer’s Market – For Now, Ms. Crotti reports that buyers can expect an average 10% drop in premiums this year. Willis, she says, is estimating a drop of between 12.5 – 15% in its premiums. Crotti says the reasons for drop include: Fewer catastrophic weather events that destroy property Low property losses – meaning fewer payouts Hedge funds and other investors “chasing the yield” that has resulted in an influx of cash into this sector Increased competition, particularly from China and London Aggressive price drops by companies aiming to keep clients and market share Regarding terrorism, Crotti says that the U.S. Congress passing the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA, formerly “TRIA”) in January also has driven … Continue reading

29 July 2015, Main hospitality insurance points from Marsh’s venerable 2015 Terrorism Risk Insurance Report

Marsh recently published its 2015 Terrorism Risk Insurance Report, one of the top yearly terrorism insurance reports. Its statistical highlights regarding the Hospitality and Gaming sector are as follows: Terrorism Insurance Take-up Rates for Hospitality and Gaming 2014: 58% 2013: 60% 2012: 60% (See figure 6) Terrorism Insurance Pricing – Median Rates for Hospitality and Gaming (Rate per million) 2014: $32 2013: $22 2012: $41 (See figure 11) Terrorism Insurance Pricing as a Percentage of Property Premium for Hospitality and Gaming 2014: 5% 2013: 3% 2012: 7% (see figure 12) Marsh says that: “Compared with rates in 2013, median property terrorism insurance premiums decreased or stayed the same in 2014” for sectors such as “energy and mining, public entity and nonprofit, and life sciences…” Marsh also points out that: “Rates increased most significantly for media, hospitality and gaming, and construction organizations.” Sources and further … Continue reading