New Age terrorists a top threat – Chubb

Recently released survey identifies main challenges for risk managers 

According to Chubb’s recently released 2019 Multinational Risk Survey Report, Africa’s risk-management community has identified terrorism as one of its greatest concerns. In a statement, the company points out that it is important for businesses to understand the threat, and to take steps to protect their financial well-being and viability in the event of a terrorist attack.

“The main challenge for risk managers is how to prepare companies for an increasingly threatening world in which terrorism and political violence are very real and changing threats,” the statement says, adding that New Age terrorists have evolved into highly innovative organisational networks that operate largely unrestrained in an environment of dispersed nodes.

“These terrorists indoctrinate discontented, unemployed or underemployed youths, often via social media. Their actions are underpinned by marked fanaticism, in addition to an indiscriminate hunger for killing and power. They are able to change their course quickly and the primary obstacle is that businesses are not as agile as the threat,” the statement says.

Quoting data from the 2016 Global Terrorism Index, the statement says the Middle East and North Africa continue to be considered terrorist prone, with only certain pockets in Africa – Botswana, Malawi, Namibia and Zimbabwe – deemed to be safe from terrorist threat.

“Terrorism and political violence are real and constantly evolving. The range of risks is growing, from violent attacks that include riots and shootings to arson and large-scale bombings. Risk managers need to prepare for this increasingly volatile world and ensure they are on top of the insurance solutions available, as well as understanding different types of cover and potential gaps,” says Chris Caalsen, a spokesman for Chubb Insurance South Africa.

“Today there is more capacity available in the standalone insurance market than ever before, with broader wordings, higher limits and more affordable terms. However, the boundaries between the various terrorism, political violence, business interruption and property covers are complex, and there may be gaps in cover.”

Caalsen says the gaps tend to arise when exposure falls between policies, or when an event causes damage which is difficult to categorise. “Given the growing political and terrorism volatility worldwide, there is a critical need for companies to re-evaluate the adequacy of their risk-management strategies and ensure that a broad a range of perils is covered, thereby reducing uncertainty and dependency on the classification of an event.

“Risk managers need to understand their changing exposures, what is covered by their insurance, the meaning of the wordings on the policies and the location of the gaps in cover. Only then can they be sure of implementing solutions through the purchase of the right protection.”

Conducted during 2018, the Chubb Multinational Risk Research Survey comprises responses from 481 correspondents from key industry sectors in 24 African countries.