Sin ttulo de diapositiva

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TERRORISM COVER IN THE CONTEXT OF
EXTRAORDINARY INSURANCE RISK



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TERRORISM COVER
GENERAL FRAMEWORK

Geological NATURAL
RISKS
Climatic Terrorism
Rebellion Political-social Sedition Risks
Uprising
Popular Disturbance
Actions by Armed Services


EXTRAORDINARY RISK SYSTEM OF COVER
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BASIC FEATURES OF EXTRAORDINARY RISK COVER

• - The risks covered are defined legally.
• Cover must be included in ordinary policies
  for personal
• accident insurance and certain sectors of
  property damage.
• Subsidiary action by the Consorcio de
  Compensación de
• Seguros.
• Compulsory surcharge collected by the entities
  issuing the
• ordinary policy.
• - Scope Spanish territory.
• Guarantee conditions as in the ordinary
  policy (capital
• insured, etc.).
• - For property, only direct material damage is
  indemnified.

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LEGAL DEFINITIONS
TERRORISM
Any violent action intended to destabilise the
established political system, or to create fear
and insecurity in the social context in which it
occurs.
POPULAR DISTURBANCE



Any group action intended to attack public
peace, creating a disruption of order and
causing personal injury or property damage.
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TERRORISM
THE SITUATION FOLLOWING 11 SEPT.
AIR NAVIGATION (Civil liability to
non-passengers)
ECOFIN authorises support measures through
reinsurance for the account of the State
SPAIN Reinsurance for the account of the State,
administered by the Consorcio de Compensación de
Seguros
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TERRORISM
THE SITUATION FOLLOWING 11 SEPT.
TERRORISM REINSURANCE FOR LOST PROFIT, BY
THE CONSORCIO DE COMPENSACIÓN DE SEGUROS
THE CCS-UNESPA AGREEMENT 31-1-2002
COVER FOR ALL POLICIES, AND IN ALL CATEGORIES
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EXTRAORDINARY RISKS
COVER FUNDAMENTALS
SUBSIDIARITY
SOLIDARITY
MUTUALISATION
PRINCIPLES
GEOGRAPHICAL
COMPENSATION
BETWEEN RISKS
TIMING
COLLABORATION
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EXTRAORDINARY RISKS
INDEMNIFICATION REQUISITES
TO HOLD DAMAGE INSURANCE IN CERTAIN CLASSES
COMPULSORY INCLUSION OF EXTRAORDINARY RISKS
PAYMENT OF THE COMPULSORY SURCHARGE
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CLASSES ACCESSIBLE TO THE CONSORCIO
FIRES AND NATURAL FORCES, MOTOR VEHICLES (Not
Civil Liability), RAILVEHICLES, ROBBERY, BROKEN
WINDOWS, BREAKDOWN OF MACHINERY, ELECTRONIC
EQUIPMENT AND COMPUTERS, FINISHED CIVIL
ENGINEERING WORK, PERSONAL ACCIDENTS
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EXTRAORDINARY RISKS
PRIVATE COMPANY If wished, Extraordinary Risks
may be covered - Along with ordinary risk
cover. - In a separate policy.
INSURER
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EXTRAORDINARY RISKS
INSURER
THE CONSORCIO DE COMPENSACIÓN DE SEGUROS Covere
d when - The private company gives no explicit
cover. (SUBSIDIARITY) - The private company does
provide cover, but cannot meet its
indemnification obligations (bankruptcy,
temporary receivership, CLEA) (GUARANTEE
FUND) THE CONSORCIO DOES NOT DIRECTLY
UNDERWRITE THE COVER
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EXTRAORDINARY RISKS
CHARACTERISTICS OF COVER

• LEGALLY DEFINED

• QUALITATIVE AND NOT QUANTITATIVE
• Not conditioned by territorial extension, by
• the number of affected parties, or extensive
  damage.

• AUTOMATIC
• Official declaration as a catastrophic area
• is not required.

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EXTRAORDINARY RISKS
RISKS COVERED
NATURAL PHENOMENA EARTHQUAKE SEAQUAKE FLOOD VOLCA
NIC ERUPTION ATYPICAL CYCLONIC STORM FALLING
SIDEREAL BODIES
PHENOMENA WITH POLITICAL-SOCIAL
EFFECTS TERRORISM REBELLION SEDITION UPRISING POP
ULAR DISTURBANCE ACTION BY THE ARMED FORCES
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EXTRAORDINARY RISKS
DIRECT MATERIAL DAMAGE
DAMAGE
INDEMNIFIABLE LOSSES
Salvage
EXPENSES
Demolition and clearing
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EXTRAORDINARY RISKS
RISKS COVERED Extraordinary Risks
SUM INSURED That of the ordinary insurance
PROPERTY AND PERSONS COVERED those under the
ordinary cover
SCOPE OF COVER
TERMS INCLUDED OPTIONALLY Included in the
ordinary cover first risks, indemnification
limits.
Application of the PROPORTIONAL RULE
30 days following the effective date of the policy
EXCLUSION PERIOD
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EXTRAORDINARY RISKS
CLAIM MANAGEMENT

• OCCURRENCE

Companies C.C.S.

• CLAIM

• Verification
• APPRAISAL Occurrence
• Cause covered

• DIRECT C.C.S. PAYMENT TO THE INSURED

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THE CONSORCIO DE COMPENSACIÓN DE SEGUROS
EXTRAORDINARY RISKS COVER FOR TERRORISM AND
POPULAR DISTURBANCE

• PROPERTY DAMAGE
• - CONSUMPTION OF PREMIUM. ALL CAUSES
• - AMOUNTS PAID ACCORDING TO CAUSES
• - AMOUNTS PAID FOR TERRORISM AND POPULAR
  DISTURBANCE,
• ALL CAUSES
• - AMOUNTS PAID FOR TERRORISM AND POPULAR
  DISTURBANCE
• BY THE YEAR OF LOSS
• - AMOUNTS PAID FOR TERRORISM AND POPULAR
  DISTURBANCE
• ACCORDING TO RISK TYPE

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THE CONSORCIO DE COMPENSACIÓN DE SEGUROS
EXTRAORDINARY RISKS COVER FOR TERRORISMAND
POPULAR DISTURBANCE

• DAMAGE TO PERSONS
• - AMOUNTS PAID FOR TERRORISM AND POPULAR
  DISTURBANCE,
• ALL CAUSES
• - AMOUNTS PAID FOR TERRORISM AND POPULAR
  DISTURBANCE BY
• THE YEAR OF LOSS
• - NUMBER OF VICTIMS OF TERRORISM AND POPULAR
  DISTURBANCE

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THE CONSORCIO DE COMPENSACIÓN DE SEGUROS
EXTRAORDINARY RISKS COVER FOR TERRORISMAND
POPULAR DISTURBANCE

• THE MOST COSTLY INDIVIDUAL LOSS CAUSED BY
• TERRORISM
• Note
• - All figures in Euros
• - All figures updated in Euros to 31-12-2001
• PROPERTY AND PERSONAL LOSS
• - AMOUNTS PAID ACCORDING TO CAUSES

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EXTRAORDINARY RISKS PREMIUM CONSUMPTION,
PROPERTY DAMAGE SERIES 1971 - 2001ALL CAUSES
EXTRAORDINARY RISKS
Updated Premiums and Loss Rate
3.000.000.000
2.500.000.000
2.000.000.000
1.500.000.000
1.000.000.000
500.000.000
0
1971 - 1980
1981 - 1990
1991 - 2000
2001
SERIES
EUROS
Premiums
Loss Rate
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EXTRAORDINARY RISKS PROPERTY DAMAGE SERIES
1971 2001
() Includes former cover for rain, hail, snow
and hurricance. () Unclassified loss rate for
the first years in the series.
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EXTRAORDINARY RISKS PROPERTY DAMAGESERIES 1971
- 2001
EXTRAORDINARY RISKS
Property Damage
Loss Rate by Cause
9
Terrorism
Popular Disturbance
Other causes
91
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EXTRAORDINARY RISKS PROPERTY DAMAGE. SERIES
1971 - 2001SUMS PAID UPDATED, BY YEAR OF
OCCURRENCE
EXTRAORDINARY RISKS PROPERTY

Amounts paid (updated),
Terrorism and Popular Disturbance
50
40
Millions of Euros
30
20
10
0
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
YEARS
EUROS
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EXTRAORDINARY RISKS PROPERTY DAMAGE SERIES
1994 2001 UPDATED SUMS PAID, DISTRIBUTED BY
RISK TYPECAUSE OF LOSS TERRORISM AND POPULAR
DISTURBANCE
UPDATED AMOUNTS PAID
SERIES 1994 - 2001. Percentage Distribution
1
16
20
Homes and Communities
Offices
8
Commerce and Other, Simple
Industrial
Automobiles
Civil Engineering Work
27
28
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EXTRAORDINARY RISKS PERSONAL DAMAGE .SERIES
1987 - 2001
EXTRAORDINARY RISKS Personal Damage
Loss Rate by Causes
10,8
Terrorism Popular Disturbance
Other Causes
89,2
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EXTRAORDINARY DAMAGE PERSONAL DAMAGESERIES
1987 - 2001UPDATED AMOUNTS BY YEAR OF
OCCURRENCE
EUROS
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EXTRAORDINARY RISKS PERSONAL DAMAGE
SERIES 1994 - 2001 NUMBER OF VICTIMS
BY YEAR OF OCCURRENCE OF LOSS CAUSE OF
LOSS TERRORISM AND POPULAR DISTURBANCE
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THE MOST COSTLY INDIVIDUAL CLAIM CAUSED BY
TERRORISM
DATE 18 April
1982 PLACE Madrid
UPDATED SUMS PAID 37.331.580
Euros INSURED Telefónica,
S.A.
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EXTRAORDINARY RISKS PROPERTY AND PERSONAL
DAMAGE - SERIES 1987 - 2001
EXTRAORDINARY RISKS
Property and Personal Damage
Loss rate by Causes
85,4
2,2
Flood
2,7
Terrorism
Popular Disturbance
9,7
Rest