Global specialty re/insurance group Chaucer reports growing demand in Mexico for insurance coverage against cartel-related violence and organized crime.
The company noted that an increasing number of businesses across diverse sectors are purchasing these policies as standard practice.
Traditionally, demand for such insurance was driven by tourism and leisure companies and multinational corporations operating in Mexico.
However, Chaucer says local businesses are now seeking coverage due to concerns about cartel violence affecting their operations and causing direct physical damage to property.
The coverage, often referred to as "organized crime cover", is being purchased for assets such as factories, industrial sites, warehouses, and toll roads. This type of insurance provides protection against property damage and business interruption caused by cartel-related violence, risks that are typically excluded under standard Property Damage and Business Interruption (PDBI) policies.
According to Chaucer, the growing demand is also tied to the geographic spread of cartel activity into previously less-affected areas, including popular tourist destinations like Cancún.
Gabriel Mayorga (pictured above), political violence underwriter at Chaucer, noted that cartel violence has expanded within the last few years to impact broader segments of Mexico's economy.
“Over the last decade cartel activity has become more dangerous – hitting wider segments of the Mexican economy,” Mayorga said. “In some cases, the cartels have deliberately targeted innocent businesses as part of their efforts to intimidate politicians and the state, for example attacks on retailers.”
Mayorga added that the increasing prevalence of cartel-related violence is leading more companies to seek insurance as a precaution against potential disruptions.
As cartel activity continues to affect Mexico's business landscape, the rise in demand for these specialized policies reflects growing concerns among industries about safeguarding operations and assets in an increasingly volatile environment.
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