Spring 2014 Bermuda Re/insurance+ILS
Terrorism – Talbot
James Skinner Talbot
Talbot is the most significant writer of terrorism coverage at
Lloyd’s, having been an active participant in the market for 20 years. “Initially it was distressed business when the IRA was active in the UK,” explained Skinner. “It was UK terrorism and terrorism in Sri Lanka and a few of the Latin American countries where such risks are excluded from property insurance.” However, appetites changed following September 11th, creating significant opportunities for a syndicate of Talbot’s experience.
“After 9/11 there was very limited terrorism capacity outside of London, which was already the main hub internationally. Business migrated here, and there was a huge opportunity. It was really the appeal of the expertise here and our willingness to step in when the rest of the world was running away from terrorism risk”, said Skinner. This willingness to stand up and be counted helped Lloyd’s establish itself as the preeminent location for the placement of global terrorism risk. Interest increased further following the Arab Spring; with clients keen to increase their terrorism coverage, which in the case of Talbot’s policies extends to political violence, riots and acts of civil disobedience.
Skinner said that Talbot has one of the larger terrorism teams in
London, supported by a strong research and analytics team that underpin its underwriting philosophy. While Lloyd’s global licensing
“It was really the appeal of the expertise here and our willingness to step in when the rest of the world was running away from terrorism risk.”
network enables the syndicate to leverage London expertise to access and write business for a global client base.
For clients looking to cede big ticket terrorism risk, Lloyd’s
subscription model is able to deliver significant capacity and oversight for even the most complex risks, said Skinner—“risks individual syndicates simply couldn’t absorb”. He said that the debate over TRIA, which has created considerable uncertainty, has prompted more buyers to enter the market, adding further impetus for terrorism coverage and will likely increase the already leading position of the London market.
Skinner agreed there is considerable ebb and flow within the
terrorism market, with opportunities spiking post-event, but he was confident that a separate terrorism market is now a permanent fixture within the industry.
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