Rest 'ensured': Lebanon's new 'terrorism" insurance policy will blow your mind!
The spate of deadly bombing in Lebanon has prompted many corporations and some individuals to seek insurance policies covering “terrorism” attacks, a number of insurance firms said Tuesday.
“We used to offer such insurance schemes to our clients before the beginning of terrorist attacks in Lebanon, but demand on these services increased remarkably only with the deteriorating situation in the country,” a representative from a well-known insurance company said on condition of anonymity.
Regular life insurance policies in Lebanon do not cover death or injury resulting from a bombing or war. The typical policies cover natural death or accidents only.
Passive war and terrorism insurance is a policy that provides financial protection against losses sustained from occurrences such as war, revolution, a military coup or terrorism. Such kinds of insurance policies are essential for companies, contractors and professionals working in hostile and high-risk locations.
Passive war coverage does not cover active participants in the conflict unless they have special insurance policies that cover such acts.
“Even if an individual is only delivering bread or any regular item to those who are involved in a war, the passive war and terrorism insurance policy would not cover him in case of death,” the source said.
He said that the demand for this type of insurance from corporations and banks had gone up by around 30 percent.
“Some banks today ask their clients to have a life insurance plan for them to secure the repayment of their loans in case their client dies,” he said.
He said that corporations and big private companies were increasingly offering employees life insurance since it only costs 15 percent of the price for the medical premium.
“The cost is minimal, and the return is considered to be fair to the employee,” he said.
Ahmad Tabaja, chairman and general manager of Compass Insurance Co., reported an increase in the demand for passive war and terrorism insurance by more than 50 percent, mainly by banks, hotels and large companies.
“Big business and corporations are worried more than ever before about the bad security situation in the country because we have never faced such a high demand on terrorism insurance policies,” he said.
Lebanon has been rocked since last year by a series of bombings related to the ongoing conflict in neighboring Syria. Moreover, the new wave of suicide attacks has created a climate of fear not only among businesses but also among Lebanese citizens who have started resorting to passive war and terrorism insurance plans to secure the well-being of their families in case they die.
“People have started asking about passive war and terrorism insurance schemes and demand on such policies by individuals increased on average between 25 percent and 30 percent,” said a representative of another insurance company, speaking on condition of anonymity.
Asaad Mirza, head of the Association of Insurance Companies, said that demand for such insurance schemes by individuals had not really increased much because the difficult financial situation of Lebanese citizens did not allow them to pay for more than their basic needs.
“The high demand on these plans is rather made by huge corporations and banks,” he said. “If the situation deteriorates further, or remains the same even, such a demand is expected to increase above the 20 percent hike witnessed nowadays.”
Mirza said that the price of passive war and terrorism insurance policies was expected to rise as well.
“Whenever the risk increases, prices will also go up,” he said.
According to Tabaja, prices of these policies have already gone up with the increase in security risks.
“Reinsurance companies are increasing their prices because the risk has increased as well,” he said.
Reinsurance is coverage purchased by an insurance company from one or more other firms as a means of risk management, to reduce their total liability.
“When the reinsurance company increases its prices, we have to do so as well,” he said.
- State of the Arab World Economy report 2016: diversify, tax, slash subsidies
- Arab investors won't dump the Trump despite anti-Muslim remarks
- UAE economy minister projects high growth despite oil prices
- UAE can set the pace for innovation in the Middle East: IBM vice president
- Business community welcomes UAE's deficit-free budget