Monday, June 24, 2019

Acts of terrorism in property insurance claim numbers

The property is often involved in the scan of a terrorist attack. Of all the acts of terrorism in the world up to 2015, the September 11, 2001 attacks in New York and Washington became an attack with the highest property loss value.

Image result for serangan 11 september 2001

Tuesday morning, September 11, 2001, four passenger jet planes in the United States were plowed. Two aircraft were hit to the World Trace Center Twin Towers in New York City. One plane crashed into the Pentagon in Arlington, Virginia. The last plane crashed in the field near Shanksville, Pennsylvania. He did not succeed about his original target, Washington DC.

The attack killed 2,996 people, including 19 pirates. A total of 6,000 others were injured. This is the deadliest attack for firefighters in American history. At least, 343 firefighters were killed while executing tasks.

The Institute fot the Analysis of Global Security (IAGS) noted that the total losses due to the attack reached $2 trillion. If a dollar is counted Rp10 thousand only, the number reaches Rp20 thousand trillion. This quintupled the value of APBN Indonesia. 

On 24 April 1993, eight years before the tragedy in America, there was a bombing at the Bishopgate, a financial district in London. The bomb coming from a truck exploded there at 10.27 am. The victim of the soul was only one person, a photographer and 44 others injured. However, this explosion destroys buildings along the Bishopgate.

A slight casualty due to a bomb attack was made on Saturday, not on weekdays. After all, there was an earlier warning that the security personnel could vacate the area.

This is not the first time London's financial district attacked bombs. Exactly a year before, not far from the Bishopgate, a bomb attack also occurred. 

The three events of this terrorism attack were recorded as three out of 10 attacks with the highest property insurance claim value of 1970 to 2015. To date, there has been no terrorist attack that losses defeat the September 11 attacks.

According to data from the Swiss Re, property insurance claims paid for damages due to September 11 attacks reached $25.15 billion. This is only a claim for property. Not to mention insurance claims for plowed planes, destroyed vehicle insurance claims, health insurance, and life insurance claims from attack victims. IAGS mentions, the total insurance claim for all losses on that event reached $40 billion. 

The bomb attack in London in 1993 was second to the total property insurance claim of $1.2 billion. There is a far enough range indeed with a loss of September 11th attack. However, the size of the claims incurred by the insurance company had led to a crisis in the UK insurance industry. 

Property insurance is a type of insurance to anticipate losses due to unexpected events that override the property. The unexpected incident could be natural disasters, fires, explosions, or attacks by other parties that make the property damaged and destroyed that leads to financial loss. Fires and floods are a frequent risk of overriding properties. However, its presence can be predicted.

Insurance companies certainly do not want to issue a policy for properties located in the area of flood subscriptions. Insurance companies will also raise insurance premiums for properties located in fire prone areas, such as markets, or factories.

Terrorism attacks include rare and unpredictable risks. That's why, when it happens and destroy several buildings at the same time, it will affect the cash flow of insurance companies.

Indeed, in the principle of insurance losses, the risk is not borne alone. Insurance companies divide the risk into reinsurance companies. This is to avoid failing to pay any claims due to catastrophic consequences. But reinsurance companies will also join "shake" when facing many claims in the same time.

In the third order is a terrorist attack that takes place near a mall in Manchester, England. This attack occurred on 16 May 1996 with the value of property insurance claim of $996 million. The bombings in the London financial district in 1992 reached the next sequence with property losses of $899 million.

Of the 10 list of terrorist attacks with the largest property loss that Swiss Re is showing, three of them occur in the United States. In addition to the September 11 attacks, the bomb explosion in the World Trade Center Garage in 1993 was also listed and was in the fifth order with property loss value of $837 million. In addition there are also bomb-filled trucks exploding in the government building in Oklahoma.

A total of four terrorism acts from a list of 10 attack lists occurred in the UK. Three explosions took place in London, and the other one was in Manchester. Three other terrorist attacks took place in Sri Lanka, North Atlantic, and Jordan.

Terrorism, in addition to raising fear and eating casualties, proved to inflict considerable harm and disrupt the economy.

Read Also : The 5 biggest insurance claims in the world

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