Tim Strong and Tom Lewis Share Insights on Geopolitical Tensions and Modeling Tools

In the face of ongoing geopolitical turmoil, with elections being held in more than 50 countries across the globe, insurers are rethinking coverage in such risk areas as strikes, riots and civil commotion, (SRCC) war, and cyber.

Carrier Management Deputy Editor, Elizabeth Blosfield, recently spoke with Aspen Head of Crisis Management, Tim Strong, and Crisis Management Senior Underwriter, Tom Lewis, about this troubling topic for the cover story of the media outlet’s Q3 2024 magazine issue.

Tim explained that due to recent geopolitical events, underwriters have been reconsidering some of the expansions of coverage that were a product of the soft market years. “For example, is it still appropriate to offer unnamed contingent business interruption coverage under a war policy?” said Tim, referring to CBI that provides coverage if a third party that isn’t named in the policy has a loss impacting the insured’s business activities or supply chain.

Amid the current global unrest, another area that carriers are reassessing is cyber. Whether it’s SRCC, cyber or war coverage, Tom said that the key for insurers in navigating the impact of global conflict and an unprecedented election year is to remain proactive. He added that Aspen does this by examining key indicators in its business areas to determine whether a certain country is likely to have civil unrest in the near future and assess that alongside aggregations. To learn more about what Tim, Tom and other thought leaders in the industry are saying about this important issue, read the full article here. Geopolitical, Election Risks Have Insurers on High Alert (carriermanagement.com)

And, in a related story appearing in the same issue of Carrier Management magazine, insurers and reinsurers are responding to heightened risks of SRCC events with better calculations of their probable maximum losses, careful risk pricing, clear contractual wordings, and by leveraging new modeling tools to help grasp this potentially costly risk.

Tim said that models can help show carriers how different event definitions could be materially affecting how much net risk they’re running on their balance sheets, which ultimately could hit earnings and their capital bases. Follow his interview with International Editor, L.S. Howard, by reading more about Tim’s views on predictive models as insurers and reinsurers brace for the possibility of increasing civil unrest. Predictive Model Delivers Insights as Insurers, Reinsurers Brace for More Civil Unrest (carriermanagement.com)