Premiums for political risk insurance up 100-600% in war-torn countries: JLT

Insurance against political risks and terrorism has become costlier by 100-600% in violence-affected countries like Yemen, insurance broking company JLT Independent has said.

Awareness of such covers is growing globally and Indian companies, too, are now opting for such covers. "There is a substantial surge in demand for this cover from large Indian corporates with operations in the Middle East, Africa and even some Far Eastern nations," said Sanjay Radhakrishnan, CEO, JLT Independent Insurance Brokers.

Such policies offer cover against damage to property due to acts of political violence and terror. Companies are also insured for losses due to business interruption during such attacks.

In addition, the global insurance space has seen the start of a dialogue around the need for customised insurance solutions to cover terror attacks like the one Paris witnessed. "JLT has initiated the dialogue. Typical political risk insurance covers damage to property, but the recent attacks did not cause such losses," said Ketan Kale, practice head, India, credit, political and securities risks, JLT. Instead, the intention was to cause panic and kill people. "So, there is a need to explore the kind of insurance required to cover such urbanised terror attacks. For instance, compensation for post-event mental trauma or psychiatric care," he added.