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TERRORISM COVER IN THE CONTEXT OF EXTRAORDINARY INSURANCE RISK PowerPoint PPT Presentation


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TERRORISM COVER IN THE CONTEXT OF EXTRAORDINARY INSURANCE RISK. TERRORISM COVER. GENERAL FRAMEWORK. Geological NATURAL RISKS Climatic Terrorism Rebellion

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TERRORISM COVER IN THE CONTEXT OF EXTRAORDINARY INSURANCE RISK

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Terrorism cover in the context of extraordinary insurance risk

TERRORISM COVER IN

THE CONTEXT OF EXTRAORDINARY

INSURANCE RISK


Terrorism cover in the context of extraordinary insurance risk

TERRORISM COVER

GENERAL FRAMEWORK

Geological

NATURAL RISKS

Climatic

Terrorism

Rebellion

Political-socialSedition

RisksUprising

Popular Disturbance

Actions by Armed

Services

EXTRAORDINARY RISK

SYSTEM OF COVER


Terrorism cover in the context of extraordinary insurance risk

BASIC FEATURES OF EXTRAORDINARY

RISK COVER

  • - 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.


Terrorism cover in the context of extraordinary insurance risk

LEGAL DEFINITIONS

TERRORISM

Any violent action intended to destabilise the established

political system, or to create fear and insecurity in the

social context in which it occurs.

POPULAR DISTURBANCE

Any group action intended to attack public peace,

creating a disruption of order and causing

personal injury or property damage.


Terrorism cover in the context of extraordinary insurance risk

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 cover in the context of extraordinary insurance risk

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, AND

IN ALL CATEGORIES


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

COVER FUNDAMENTALS

SUBSIDIARITY

SOLIDARITY

MUTUALISATION

PRINCIPLES

GEOGRAPHICAL

COMPENSATION

BETWEEN RISKS

TIMING

COLLABORATION


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

INDEMNIFICATION

REQUISITES

TO HOLD

DAMAGE

INSURANCE IN

CERTAIN

CLASSES

COMPULSORY

INCLUSION OF

EXTRAORDINARY

RISKS

PAYMENT OF

THE

COMPULSORY

SURCHARGE


Terrorism cover in the context of extraordinary insurance risk

CLASSES ACCESSIBLE TO THE

“CONSORCIO”

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


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

PRIVATE COMPANY:

If wished, Extraordinary Risks may be covered:

- Along with ordinary risk cover.

- In a separate policy.

INSURER


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

INSURER

THE “CONSORCIO DE COMPENSACIÓN DE

SEGUROS”:

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


Terrorism cover in the context of extraordinary insurance risk

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.


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

RISKS COVERED

NATURAL PHENOMENA

EARTHQUAKE

SEAQUAKE

FLOOD

VOLCANIC ERUPTION

ATYPICAL CYCLONIC STORM

FALLING SIDEREAL BODIES

PHENOMENA WITH

POLITICAL-SOCIAL EFFECTS

TERRORISM

REBELLION

SEDITION

UPRISING

POPULAR DISTURBANCE

ACTION BY THE ARMED FORCES


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

DIRECT

MATERIAL

DAMAGE

DAMAGE

INDEMNIFIABLE

LOSSES

Salvage

EXPENSES

Demolition and clearing


Terrorism cover in the context of extraordinary insurance risk

GENERAL: 10% loss

FRANCHISE

(Property Damage)

INDEMNIFICATION

LARGE CAPITALS: 15%

> 1 % of the insured sum

NO

< 150.25 Euros

EXTRAORDINARY RISKS

RISKS COVERED: Extraordinary Risks

SUM INSURED : That of the ordinary insurance

PROPERTY AND PERSONS COVERED: those under the

ordinary cover

SCOPE OF

COVER

TERMS INCLUDED OPTIONALLY

Included in the ordinary cover: first risks,

indemnification limits.

Application of the PROPORTIONAL RULE

30 days following the effective date of the policy

EXCLUSION PERIOD


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS

CLAIM MANAGEMENT

  • OCCURRENCE

Companies

C.C.S.

  • CLAIM

  • Verification

  • APPRAISALOccurrence

  • Cause covered

  • DIRECT C.C.S. PAYMENT TO THE INSURED


Terrorism cover in the context of extraordinary insurance risk

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


Terrorism cover in the context of extraordinary insurance risk

THE “CONSORCIO DE COMPENSACIÓN DE SEGUROS” EXTRAORDINARY RISKS: COVER FOR TERRORISMAND 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


Terrorism cover in the context of extraordinary insurance risk

THE “CONSORCIO DE COMPENSACIÓN DE SEGUROS” EXTRAORDINARY RISKS: COVER FOR TERRORISMAND 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


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS: PREMIUM CONSUMPTION, PROPERTY DAMAGESERIES 1971 - 2001ALL CAUSES

EXTRAORDINARY RISKS

Updated Premiums and Loss Rate

3.000.000.000

2.500.000.000

2.000.000.000

1.500.000.000

1.000.000.000

500.000.000

0

1971 - 1980

1981 - 1990

1991 - 2000

2001

SERIES

EUROS

Premiums

Loss Rate


Extraordinary risks property damage series 1971 2001

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.


Extraordinary risks property damage series 1971 20011

EXTRAORDINARY RISKS: PROPERTY DAMAGESERIES 1971 - 2001

EXTRAORDINARY RISKS

Property Damage

Loss Rate by Cause

9%

Terrorism +

Popular Disturbance

Other causes

91%


Extraordinary risks property damage series 1971 2001 sums paid updated by year of occurrence

EXTRAORDINARY RISKS – PROPERTY DAMAGE. SERIES 1971 - 2001SUMS PAID UPDATED, BY YEAR OF OCCURRENCE

EXTRAORDINARY RISKS: PROPERTY

Amounts paid (updated),

Terrorism and Popular Disturbance

50

40

Millions of Euros

30

20

10

0

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

YEARS

EUROS


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS – PROPERTY DAMAGE SERIES 1994 – 2001 UPDATED SUMS PAID, DISTRIBUTED BY RISK TYPECAUSE OF LOSS: TERRORISM AND POPULAR DISTURBANCE

UPDATED AMOUNTS PAID

SERIES: 1994 - 2001. Percentage Distribution

1%

16%

20%

Homes and Communities

Offices

8%

Commerce and Other, Simple

Industrial

Automobiles

Civil Engineering Work

27%

28%


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS: PERSONAL DAMAGE .SERIES 1987 - 2001

EXTRAORDINARY RISKS: Personal Damage

Loss Rate by Causes

10,8%

Terrorism + Popular

Disturbance

Other Causes

89,2%


Extraordinary damage personal damage series 1987 2001 updated amounts by year of occurrence

EXTRAORDINARY DAMAGE – PERSONAL DAMAGESERIES 1987 - 2001UPDATED AMOUNTS BY YEAR OF OCCURRENCE

EUROS


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS – PERSONAL DAMAGE SERIES 1994 - 2001 NUMBER OF VICTIMS BY YEAR OF OCCURRENCE OF LOSS CAUSE OF LOSS: TERRORISM AND POPULAR DISTURBANCE


Terrorism cover in the context of extraordinary insurance risk

THE MOST COSTLY INDIVIDUAL CLAIM

CAUSED BY TERRORISM

DATE: 18 April 1982

PLACE: Madrid

UPDATED SUMS PAID: 37.331.580 Euros

INSURED: Telefónica, S.A.


Terrorism cover in the context of extraordinary insurance risk

EXTRAORDINARY RISKS – PROPERTY AND PERSONAL DAMAGE - SERIES 1987 - 2001

EXTRAORDINARY RISKS:

Property and Personal Damage

Loss rate by Causes

85,4

2,2

Flood

2,7

Terrorism

Popular

Disturbance

9,7

Rest


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