It seems like the apparent increase of terrorism will not result in an increase of insurance premiums. Instead, insurance firms are adding numerous exclusions to their travel policies.
Should a holidaymaker be unlucky enough to be hit directly or indirectly by a terrorist attack he will not be covered by his insurance policy. A travel agent informed The Malta Financial and Business Times that several insurance agencies have already resorted to these kinds of exclusions from their policies.
The 2005 Terrorism Risk Map published by UK-based AON insurance brokers allows tourists to analyse the likelihood of terrorist attacks in their next destination. The terror map, which can be viewed on www.aon.com, classifies each state according to the threat of attacks from terrorist groups.
The classification ranges from low, guarded, elevated, high or severe. According to AON the source of terror attacks is a diverse hotch potch of ideological backgrounds and other groups that simply serve their own personal interests. Nationalists, religious extremists, far right and Marxist groups and narcotic traders are those organisations mentioned as posing a threat.
Joseph Cutajar from AON Malta explained that this map “served as a tool, and that it was up to the underwriters whether to use it.” He is of the opinion that premiums are to a certain extent subjective. Each underwriter extrapolated the risk of losses according to his perception. The likelihood that this map will mould the holiday preferences of consumers is very minute.
The visual reportage of blown up buildings and people running around in disarray looking for their loved ones and their belongings would probably have a more visceral effect and be the causation of last minute cancellations.
London and Kashmir are singled out as a high-risk city and region respectively.
Amongst the countries categorised as low risk are the states which traditionally refrain from taking strong stands in international disputes. Finland, Sweden and Norway are listed as low risk. With the exception of Portugal, all of Western Europe, which is popular with Maltese holidaymakers, is classified as ‘elevated’ risk. This includes the United Kingdom, France, Italy, Spain, the Netherlands as well as Belgium.
As expected, the risk of encountering an attack in India, Saudi Arabia, Colombia and Somalia is severe.