Adapting to a Terrorism insurance market in constant flux

Discussing the ongoing and emerging trends within the political violence and terror (PVT) market and why a ‘prudent’ approach to portfolio management and risk is critical for insurance carriers.

Published on March 1, 2025

By Chloe Gordge

Head of Terrorism - London |

4-minute read

Over the past 12 years, the political violence and terrorism (PVT) market has experienced a significant shift in rates, risks and exclusions in the wake of a series of major events that have sent shockwaves across the globe.

From the Manchester Bombings to the situation in Gaza, volatility is a constant fixture in the PVT market, forcing carriers to routinely re-evaluate their policy wordings for multiple territories.  

Chloe Gordge has witnessed the ebbs and flows of the market, having joined the organisation’s War and Terrorism team in London 12 years ago. Despite the ramifications of events in recent years, she notes that the ability to be flexible, adaptable and innovative are paramount for underwriters in the space, to ensure clients are fully supported as geopolitical tensions intensify.

“As a leading terrorism insurer, Markel has underwritten through political turmoil in Thailand, fallout from political vacuums in the Middle East after the end of the US/UK involvement in Iraq and Afghanistan, ISIS-inspired lone wolf terrorist attacks across western Europe, as well as large civil unrest movements. These have all resulted in significant property damage within the US, Chile, South Africa, Peru, Hong Kong, France and New Caledonia.”

She continues: “The crucial skills I’ve developed through these political events have been flexibility and innovation in creating insurance solutions, while maintaining a collaborative mindset.” 

Gordge started her professional career at Markel in 2013 and was last year promoted to Head of Terrorism, where she’s been instrumental in developing products for brokers and clients in an increasingly unpredictable threat landscape.

A prudent approach to insuring PVT risk is key

The above has involved taking a more prudent approach to portfolio management, placing keener focus on ensuring rate adequacy and a forward-looking outlook to risk so Markel can continue providing tailored coverage for clients in higher-risk territories over the long term.

Article highlights

Flexibility and innovation are key in the evolving terrorism insurance market.
Political events shape the skills needed for effective insurance solutions.
Past trends can't predict future risks in war and terrorism insurance.
War and terrorism insurance requires constant adaptation to evolving risks.
Geopolitical tensions demand a prudent approach to terrorism insurance.

War and terrorism will continue to be a complex line of insurance, because the risk that is insured is constantly evolving itself.

Gordge notes: “Although we always need to look for historic trends in claims data, akin to other business lines, one of the key differentiators of war and terrorism insurance is that the past cannot predict the future.”

She expands: “Thinking about the multitude of geographic regions, perils and organisations that have individually been the main cause for concern for war and terrorism underwriters at different points over the past 12 years shows how dynamic the ‘risk’ we’re trying to price and provide an appropriate insurance solution for is.”

Gordge admits it’s been a challenging couple of years for the market as she and her team navigate an increased focus on this business line from reinsurers and Lloyd’s, due to heightened geopolitical risks, including the Kenya anti-bill protests, the imposition of martial law in South Korea, and the Russia-Ukraine and Israel-Hamas conflicts, that have brought the policies they underwrite into the mainstream media.

It’s been a period, she says, of balancing the portfolio and clearly articulating the underwriting strategy to stakeholders, while focusing on maintaining coverage at sustainable levels for insureds at a time when there is acute need.

Trends and developments to look out for

Looking ahead, the ongoing conflicts in Ukraine and the Middle East are likely to have repercussions in the regions themselves, Gordge predicts, due to ongoing war losses, protest and potential coup d’etat risks, linked to large displacement of people.

According to her findings, this combination of factors could result in an increase in terrorist attacks, following the radicalisation of individuals who are far removed geographically from these wars but have been influenced online to be sympathetic towards radical causes.

Flexibility and innovation in creating insurance solutions are crucial skills developed through political events.

From a dataset of 231 US-based IS terrorists recorded between 2010 and 2020, online activity was found to be present in 92% of all cases and more than 80% interacted online with co-ideologues. Meanwhile, 80% used social media platforms for at least some of their activities and 36% had disseminated propaganda online.

Elaborating on these statistics, Gordge explains that “Online polarisation continues to seep into the political make-up of many countries’ ruling parties – potentially raising risks of protest and counter-protest movement clashes, as well as increasing incidences of lone wolf attacks.”

“Organised crime groups also continue to present the highest risk to businesses and individuals in many regions of the world and therefore insurance buyers need to be provided with adequate protection from the potential damage that these groups can cause,” she asserts, highlighting the security situation in Tabasco, Mexico, as a prime example where a reported 193% year-over-year increase in the number of homicides and a 180% rise in reported kidnapping cases were documented between January-October in 2024 alone.

Gordge stresses that the PVT market has a fundamental obligation to investigate and closely monitor the likely impacts of these events and what the longer-term effects – both direct and indirect – could have for end clients when disaster strikes.

“It is important the market strives to ensure it interrogates policy coverage, exclusions and pricing to make sure the clients who rely on insurance when they’re impacted by political violence events find the coverage responds as they expect, while being provided access to crisis management services from their carriers.”

Gordge concludes “War and terrorism will continue to be a complex line of insurance, because the risk that is insured is constantly evolving itself, and so, to continue offering tailored solutions, the market needs to keep evolving and adapting.”