Brokers and insurers must take care to educate clients on the increased risks facing travellers, as well as the terrorism and war coverage options available to them, says a special risk underwriter.
“Given the uncertainty of the world we live in today, we are seeing more and more travelers purchase War and Terrorism coverage as an extra layer of protection,” says Chris Carr, manager of Special Risk Underwriting at Sutton Special Risk. “Premiums are reasonable and provide an extra layer of security for individuals and expatriates travelling abroad.”
Demand for war and terrorism coverage has grown among travellers as confirmed and alleged terrorist incidents are increasingly reported, most recently the down Egypt Air flight that plummeted into the Mediterranean Sea while on route to Cairo from Paris. All 66 passengers, including two Canadians, were killed in the crash. Terrorism is considered a potential cause by Egyptian authorities.
Types of war and terrorism coverage include Major Medical, Disability and Accidental Death & Dismemberment benefits. “This coverage will provide travelers and their respective family members with coverage for medical expenses, a disability benefit, or an accidental death benefit in the event they are injured, disabled, or killed as a result of an act of war or terrorism,” Carr says.
While countries such as the Middle East still have the highest premiums, Carr says Sutton is seeing more travellers purchase countries that used to be classified as “extremely safe”, with minimal threat of an act of terrorism. He adds that while acts of terrorism are becoming increasingly frequent, terrorism and war coverage remains a reasonably affordable product with substantial coverage.
“Premiums are fluid and the rates are constantly changing depending on the country and nature of the risk,” he says.
According to the 2015 Global Terrorism Index by the Institute for Economics, private citizens are most frequently targeted in terrorist attacks, with a 174% increase in victims between 2013 and 2014.
“Terrorism has become more lethal across the world. Globally there were on average 1.82 people killed per attack in 2013,” states the report. “This increased by 34 per cent to 2.44 people killed per attack in 2014. This is the highest levels of lethality since 2007 when deaths due to terrorism increased because of a dramatic increase in bombings in Iraq.”
