Conference on Terrorism Risk Insurance

1-2 June 2010 - OECD Conference Centre, Paris, France

Ensuring fast economic recovery in the event of a major terrorist attack is critical, and insurance plays a central role in this respect. Following the events of September 2001, the OECD had developed extensive work on the issue of the financial management of terrorism risk. A large conference on terrorism and other large-scale risks, gathering top decision makers and experts in the field, was organised in 2004. The resulting conference proceedings "Catastrophic Risks and Insurance" and the 2005 report on “Terrorism Risk Insurance in OECD Countries” attracted considerable attention.

Five years later, the aim of this conference was to review the current status of terrorism risk insurance programs established in 11 OECD countries as well as terrorism (re)insurance market trends, provide some insights on whether insurance solutions can be viewed as adequate as compared to the level and characteristics of terrorism risk, and learn from best practices.

The Conference on Terrorism Risk Insurance was organised under the aegis of the OECD International Network on the Financial Management of Large-Scale Catastrophes in association with the Australian Reinsurance Pool Corporation (ARPC). It gathered more than one hundred experts, among whom the heads of all the terrorism insurance programs set up in OECD countries, as well as in Israel and in Russia, renowned experts in disaster management from the public sector and the industry (insurers, reinsurers, risk modeling firms) and leading research institutions.

The conference was opened by Richard Boucher, Deputy Secretary-General of the OECD. It was sponsored by the ARPC, Guy Carpenter and RMS. The main outcome of the conference was the creation of an OECD International Platform on Terrorism Insurance.

Meeting documents

Presentations

Terrorism in 2010: An Outlook

Chair: Robert Muir-Wood, Chief Research Officer, Risk Management Solutions

Main features of the terrorism risk in 2010

Keynote speaker: Jean-Louis Bruguière, Former leading investigating magistrate in charge of counter-terrorism.

Recent progress in terrorism risk modelling

Paul Trushell, Director CIPMA Program, Critical Infrastructure Resilience Policy Branch, Attorney-General’s Department, Australia
Gordon Woo, Chief Architect for the RMS Terrorism Model, Risk Management Solutions, United Kingdom

Terrorism Risk Insurance Markets: Where do we stand?

Chair: Paul Kleindorfer, Distinguished Research Professor, INSEAD

Terrorism insurance programmes: overview, recent evolution, challenges

James Wrynn, Superintendant, New York State Insurance Department, United States
Christiane de Bondy, Secretary General and Francois Vilnet, Vice-Chairman, GAREAT, France
Dirk Harbrucker, Member of the Executive Board, Extremus Versicherungs-AG, Germany
Ignacio Machetti, General Manager, Consorcio de Compensacion de Seguros, Spain

Creating terrorism pools today: experience from Belgium and Denmark

Marc Dierckx, Director, Terrorism Reinsurance and Insurance Pool, Belgium
Michael Holm, Director, Reinsurance and General Insurance, Finanstilsynet, Denmark

Market trends: evolution of demand, take-up rates, premiums, type of contracts, extent of coverage, exclusions

Chair: Paul Allison, Principal, Chief Operating Officer, Australia and New Zealand, Guy Carpenter

Erwann Michel-Kerjan, Managing Director, Center for Risk Management, The Wharton School, United States; Chairman, Board of the OECD International Network on the Financial Management of Large-Scale Catastrophes
Bruno Spicher, Manager, Swiss Terrorism Pool, Switzerland
Thomas Hlatky, Head of Property Insurance, Grazer Wechselseitige Versicherung AG, Austria
Alexander Gulchenko, President, Terrorism Risk Insurance Pool, Federal Service for Insurance Supervision, Russian Federation

A Focus on Terrorism Risk Reinsurance

Rationale, modalities, evolution of public reinsurance

Chair : Adrian Blundell-Wignal, Deputy Director, Directorate for Financial and Enterprise Affairs, OECD; Special Advisor to the Secretary-General for Financial Markets

Neil Weeks, Chief Executive Officer, Australian Reinsurance Pool Corporation, Australia
Pierre Michel, Executive Vice President, Caisse Centrale de Réassurance, France
Steve Atkins, Chief Executive Officer, Pool Re, United Kingdom
Niek Bos, Manager, Dutch Terrorism Risk Reinsurance Company, the Netherlands
Jeffrey Bragg, Executive Director, Terrorism Risk Insurance Program, United States

Commercial reinsurance: market trends, future prospects, alternatives

Chair: Werner Bugl, Director Business Development, Asia Capital Reinsurance Group

Chris Klein, Managing Director, Global Head of Business Intelligence, Guy Carpenter
Serge Troeber, Managing Director, Property & Specialty, Swiss Re
Torsten Kraus, Deputy Head of Topic Network Terrorism, Munich Re

In the press

OECD Launches Platform to Coordinate International Terrorism Insurance, Insurance Journal, International news, 14 June 2010
The heads of all the national terrorism insurance programs of the OECD (Organization for Economic Co-Operation and Development) member countries met earlier this month at the OECD headquarters in Paris in an attempt to assure that terrorism risks will continue to be adequately covered.
Face aux risques terroristes, l'OCDE prône une réponse financière globale, Les Echos, 7 June 2010
L'organisation internationale s'interroge sur l'adéquation des divers mécanismes d'assurance à la nature actuelle de la menace terroriste. Elle va créer une plate-forme internationale sur la couverture financière de ce risque.

Ensuring That Our Economies Remain Terror-Proof, The Huffington Post, 23 June 2010
by Erwann Michel-Kerjan
Who should pay for the next major terrorist attack? In a world under budgetary pressure, where huge sums of private and public fiscal resources have been mobilized to cope with the financial crisis and a series of unprecedented natural and man-made disasters, governments and enterprises are not eager to assume more risks. Yet, when economic stability is at stake, is the lack of government involvement in terrorism risk coverage in many countries the most sound option today?