Global conflicts oppose the demand to secure war risks

As the conflict in Ukraine and the Middle East continued, there was no global demand that was not more than that-the war securing the war risks.

When a Russian missile was damaged by Natalia Greakko’s apartment in a tower building on the outskirts of Kiev last November, good luck was not.

The daughter of Mrs. Greakko, Alina Calciva, says the missile fell about 100 meters (328 feet) from the building. “The wave of the explosion was damaged by my mother’s balcony, windows, doors, and interior from the apartment.”

While her mother was “very annoyed and cried” to start, Mrs. Calcivia says that she ultimately felt calm because they secured the apartment against such an attack.

Because while public families insurance does not cover the damage to the conflict – whether you live in Ukraine or a country that is not attacked – Mrs. Chefa had insight to take out specialized insurance coverage of the war risks to her mother. The insurance company paid $ 1,000 (740 pounds) to help cover repairs.

The annual installment or cost was $ 52, and the 33 -year -old says that she “did not hesitate to buy it. As it became clear it was the right decision.”

Even his Ukrainian colleague, Ekaterina Vasileiva, took out the war risks policy for her car in April 2024. It was in particular time, because after only one day her car was damaged by Russian shrapnel when it was parked on a street in the coastal city of Odessa.

“Only the day before to extend the comprehensive insurance on the car, and the director offered me to obtain insurance against military risks,” she says. “The cover saved me a lot because after the Russian attack, the car looked like a sieve.”

War risk insurance is the general term for the sector, which also provides coverage against terrorism. Industrial experts say it has grown significantly since the September 11 attacks in the United States in 2001.

While individuals can take out the cover of war risks, the vast majority of policies are bought by companies that want to guarantee their operations, facilities and employees around the world. Especially in countries and regions of high risk.

Although it is difficult to obtain data for an industry that does not seek the spotlight, one commercial publications have estimated this year that the global amount that has been spent on the total war risk secures now One million dollars (800 million pounds) annually.

It is said that 621 million pounds, or approximately 80 % of this number, goes to specialized insurance companies in the city of London, which is the International Risk Insurance Market Center.

Joanna Cozins chaired a political team and nine people from London-based Insurance Company.

It cited an example of a large energy facility in Iraq, owned by a Western company, which has been attacked several times in recent years.

Mrs. Couousins ​​says that the owner eventually bought more than 100 million pounds of war risk cover, without which she “has stopped or reduced to a large extent” operating the site.

People in the war risk market are usually not keen to talk about the amount of policy costs. But for a British or American company operating in Lebanon or Israel, “currently, insurance premiums are priced between 0.5 % and 2 % of the total cover they buy,” says one of the senior insurance officers of the war risks in London, who requested not to be named.

The believer is a financing specialist that determines the level of risk of applying insurance, then calculates the cost of the cover.

The range from 0.5 % to 2 % means that if a company wants 100 million pounds from the annual cover, it must pay between 500,000 pounds and 2 million pounds. However, these rates “will fluctuate greatly as the situation in various countries in the Middle East is volatile,” and the literature that has not been named adds.

It is said that the installments of the stable Gulf states are much lower, from 0.025 % to 0.05 % of the total covered amount.

What is the policy already covered can vary. For example, the company can get kidnapping coverage and ransom, or to treat serious injuries, or the cost of dealing with an active “attacking” position.

“The market grows in power and demand,” says Daniel Heller, head of subscription, head of the terrorist group and political violence at the Munich insurance company.

“There are more risks that customers can buy coverage, especially around an active shooter, but also strikes and riots.”

War risk cover is organized in seven “buckets” that extend a different intensity of the conflict. Vandalism and terrorism are the lowest, while civil war and education are the highest.

“Many insurance companies are trying to provide all this coverage, as it is often not clear where the situation has moved from the threat of terrorism, to the civil war, and even the war between the states,” says Raveem Ismail, founder of the Specialized Insurance Company in London.

The war risk sector is concentrated on London due to the continued strength of Lloyds in London, which has been a specialized insurance market since 1689.

Lloyds is also a home to re -secure war risks – companies that buy and sell the cover.

Mrs. Cousins ​​says that this is spreading possible exposure. “Each (reformulation) covers a certain percentage of risk, anywhere ranging from one to 10 %,” she says.

Constantine Jordge, a financial professor at the University of North Colorado, and an expert in risk study and conflict financing, says that the challenge facing the risk sector in the war is to determine the coverage fee allowance.

“Wars and conflicts in general are black black events (very rare),” he says. Because of this scarcity, he adds that “historical data tends to be a weak basis for creating any response.”

However, Mr. Ismail notes that warfare of war can be very profitable, which contradicts the auto insurance sector.

He says: “As a car insurance company, for every £ 1 of the insurance installments you take, you pay nearly 1.05 pounds in claims,” ​​he says. You may think mathematics do not add there, but Dr. Ismail says that car insurance companies make 5p and more than investment income.

In contrast, the warfare funds can be paid Less than 2 %. Simply put, car accidents are still more common than war damage.