The oldest terrorism risk pool – the Consorcio de Compensacion de Seguros (CCS) – was established in Spain in 1941. The reason for creating a risk pool was in order to respond to losses related to the Spanish Civil War (1936 – 1939). This risk pool consequently covers extraordinary risks including natural events, events violently caused as a consequence of terrorism, and actions of armed forces during peacetime. The early establishment of such an institution was closely related to separation forces within Spain which subsequently caused various acts of terrorism and civil unrest / riots.
The South African Special Risks Insurance Association (SASRIA) was created in order to insure or reinsure against losses or damage to property directly related or caused by any act directed to overthrow the government by means of fear, terrorism or violence. The reason for this early establishment (1979) is again closely related to inner political and social facts. As South Africa was facing a difficult political and social situation at this time, insurance or reinsurance covering such risks had to be created.
Another terrorism risk has been set up in 1993 by the UK government and the insurance industry in order to offer coverage for damage caused by acts of terrorism to commercial property in Great Britain. An act of terrorism is defined as followed:
“acts of persons acting on behalf of, or in connection with, any organisation which carries out activities directed towards the overthrowing or influencing, by force or violence, of Her Majesty’s government in the United Kingdom or any other government de jure or de facto.”
This Pool Reinsurance Company was formed because of a series of terrorism incidents in the early 1990’s in London and...