Reinsurance capacity and the general appetite to write risks of political violence are shrinking as insured losses from civil unrest rise, according to a report published on Wednesday by Allianz Commercial, a unit of Allianz SE.
The report said insurers have paid out nearly $13 billion from just seven civil unrest events globally in recent years and that unrest is spreading more rapidly and widely, in part due to social media. .
Demand for political violence coverage is increasing following the damage caused by recent protests and civil unrest in Chile, South Africa, France and the US
Security is a growing concern at elections this year in at least 70 countries, including elections in the US, India and Indonesia, home to nearly half the world’s population.
The report said a narrow result in the US in November could escalate existing tensions, especially in the battleground states.
Recent incidents of political violence in the US include the attack on the Capitol on January 6, 2021, and the placing of pipe bombs at Democratic and Republican headquarters the night before the Capitol attack.
“Insurers continue to look for solutions to limit and better monitor their exposure as they look at the worsening global situation,” Serdjan Todorovic, head of political violence and hostile environment solutions at Allianz Commercial, said in the report.
He said multinational businesses are showing more interest in political violence coverage than small businesses with simple production and supply chains.
