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New fashion in Brazil - insurance against terrorism

Publish date 09 August 2013
New fashion in Brazil - insurance against terrorism image

After the mass unrest, which led to serious damage during the Confederations Cup in June, foreign companies operating in the "coffee country" began to insure their assets against terrorism, writes

Demand has led to supply - the American giant AIG has already offered this service on the local market. AIG offers the corporate sector a standard policy with coverage of up to $ 87 million, expandable up to $ 500 million.

Terrorism insurance is a relative novelty on the market - it appeared in the United States after the 2001 attacks.

AIG already offers this policy in a number of countries in Europe, the United States, Canada, Mexico and Colombia. There has been no demand for such insurance in the country of carnivals so far, and standard property policies do not cover terrorism damage. Brazil is generally considered one of the countries with low risks of terrorism.

However, this is changing on the eve of the World Cup finals in 2014 and the Olympics in 2016, as these are events related to the gathering of many people from different nationalities.

The companies gained a bitter experience in June, when up to 1.5 million protesters protested on the streets of major cities during peak hours. The protests caused severe damage, and the country's corporations did not receive compensation because they did not even have insurance against vandalism.

The new insurance also benefited from the discovery and defused bomb in a church during the pope's July visit.

"The market in Brazil is becoming more mature and we see serious prospects here," Fabio Cabral, director of risk at AIG Brasil, told Erosa magazine.

According to Kate Martin, an international consultant at Aon Brasil, so far the greatest interest in the new insurance is from companies - operators of infrastructure projects.

According to the requirements of FIFA, everyone who in some way participates in the organization of the world finals must have insurance. The event was also reinsured by the German giant Munich Reinsurance Co, although the amount of coverage was not disclosed.

However, previous finals in South Africa were insured for more than 7.5 billion euros.