Terrorism in Australia: Countering a changing risk
The 2016 Global Terrorism Index1 reported a 650% increase in terrorism related deaths across OECD countries. In Australia, more than a dozen major terrorist plots have been foiled by counter-terrorism agencies since the national threat level was raised to probable in 20142. But while the threat of terrorism in developed countries continues to climb, it is the shifting nature of these terrorism events that is pushing the insurance industry to reassess cover for these risks.
Many of the atrocities witnessed so far in 2017 - London, Manchester, Paris, Stockholm, St Petersburg, Las Vegas – all bear the hallmarks of “lone wolf” attacks or “lone attacker” events. Typified by being small-scale, and causing high loss of life but limited property damage, these events can leave devastating effects on an organisation’s operations, assets, people and day-to-day running of the business.
The increased frequency of these incidents also brings a challenge to businesses, particularly where losses are not fully recoverable from insurance, or may fall into the “grey” area between a claimable and non-claimable loss under traditional insurances.
For Australian businesses, is the ARPC adqequate? How are insurers responding to the changing nature of terrorism risk? What coverage options are available in the insurance market?
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1. Institute for Economics & Peace, Global Terrorism Index 2016
2. Federal Minister for Justice (2016, December 23), Press Conference