In Chile, the riots triggered by hikes to public transport fares (Oct/Nov 2019) are estimated to have caused approximately USD 370 million-worth of damage to the capital’s metro system alone. In France, the Gilet Jaunes protests that were ignited by tax increases on fuel (Nov 2018 – March 2019), caused an estimated economic loss of USD 4.43 billion and an estimated insured loss of USD 220 million. If correct, they represent the largest insured civil disorder loss in American history. However, early industry estimates of the financial fall-out from the events which began in Minneapolis this year, before spreading to other major cities, currently fall between USD 1 billion and USD 3 billion. As highlighted by my colleague Tim Fletcher in his blog on the recent events in the U.S., up until this year the country’s most costly events were the 19 Los Angeles riots respectively, with losses equating to USD 357 million and USD 1,400 million today. Overview of damagesĮxact figures on the scale of the damage caused during previous events can be difficult to obtain. The insurance of political risks in marine insurance is not the subject of this article.
It also suggests preventive measures that can help to reduce losses and guidance on exposure-oriented underwriting. This article looks at different forms of politically motivated loss events and describes current coverages using the U.S. Instead, special cover facilities cater to these risks. It’s worth noting that in many global markets traditional Property and Business Interruption policies do not cover losses caused by politically motivated actions though the consequences of civil unrest, strikes, or lockouts are sometimes partially covered. Unsurprisingly, the demand for insurance products that protect against politically motivated loss events is also increasing – this is the case for both industrial and commercial risks. For example, environmental issues such as pollution, and the protection of natural habitats and landscapes, have also contributed to the rising levels of political action seen in recent years. So too are the societal and political shifts that continue to widen the gap between the richest and poorest in many countries.Īnd, while civil disorder is most associated with economic, social, and political circumstances such as corruption, oppression, and financial stability, these are not the only causes. Given our industry’s role in protecting individuals, their property, and their livelihoods, the subsequent losses for insurers can be enormous, often extending to millions of euros.īy helping individuals to galvanize political action and protests worldwide, social media is certainly playing a role in the increasing levels of politically motivated property damage we are seeing. Incidences such as the Gilet Jaunes protests in France in 2019, and the powerful demonstrations which continue to erupt across America following the tragic killing of George Floyd earlier this year, offer a stark reminder that even supposedly “stable” regions are not immune to such events.Īs also witnessed here in Germany this summer, “peaceful” meetings and demonstrations do not always go as planned and can descend into riots, damage to property, and looting. From the protests which swept across Latin America in 2019 to those witnessed more recently in Hong Kong and Beirut, citizens around the world have been mobilizing to express their anger, frustration, and solidarity in significant numbers.
The root and contributing causes may be varied and complex, but there is no denying that we are living in a period of heightened civil unrest. Strike, Riot and Civil Commotion – An Increasingly Significant Form of Coverĭeutsch By Leo Ronken, Property/Casualty Senior Consulting Underwriter, Cologne Horst Eilers, Property/Casualty Senior Underwriting Specialist, Cologne