Impact of terrorism on the motor insurance industry: MIB insight
- We are all sadly only too well aware of the tragic events which unfolded recently in Manchester and London.
- Both involved the use of a motor vehicle to perpetrate a terrorist attack tragically causing many injuries and deaths.
- Paul Ryman-Tubb, Chief Technical Officer for MIB discusses the implications for motor insurers following a vehicle based terrorist incident.
We are all sadly only too well aware of the tragic events which unfolded on the 22 March 2017 in Westminster, on 3 June 2017 on London Bridge and on the 18 June 2017 in Finsbury Park. All involved the use of a motor vehicle to perpetrate a terrorist attack tragically causing many injuries and deaths.
The Motors Insurers Bureau (MIB) published an insight report last week, to ensure members had full understanding of their exposure to terrorism events where vehicles are involved.
“From a motor insurance industry perspective, exposure to this kind of incident brings large scale financial and reputational risks. Such exposure may be via the MIB, but could equally fall on an individual insurer owing to a combination of the legal position, the MIB Agreements and the MIB Articles of Association.
From this short analysis it can be seen that insurers of vehicles are unlikely to have any policy or legal obligation to pay victims of a vehicle based terrorism attack. It is only right that victims have a route to compensation and at the moment that is via the MIB Agreements. However, by virtue of the MIB Articles where there is a policy in place on the vehicle involved, individual insurers and their re-insurers are exposed to the costs of such incidents.
The implications for individual insurers and reinsurers, and the market as a whole have been brought into sharp focus by recent tragic events.”
Please see the attachment in Further Information for the MIB’s full report.