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The Perception of Terrorism in Pakistan and the Advantages of a Local Solution

The Perception of Terrorism in Pakistan and the Advantages of a Local Solution. The London Market Today. Post September 11 th 2001, saw a surge in standalone demand All types of occupancy from all regions around the world Not just traditional target buyers 2009 total Lloyd’s income GBP 391m

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The Perception of Terrorism in Pakistan and the Advantages of a Local Solution

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  1. The Perception of Terrorism in Pakistan and the Advantages of a Local Solution

  2. The London Market Today • Post September 11th 2001, saw a surge in standalone demand • All types of occupancy from all regions around the world • Not just traditional target buyers • 2009 total Lloyd’s income GBP 391m • North America – GBP 90m • Western Europe – GBP 75m • Asia Pacific – GBP 40m • Central & Latin America – GBP 25m • Middle East & North Africa – GBP 32m • Multi National programmes – GBP 131m • Pakistan currently accounts for just under GBP 6m – 1.5% of total premium income.

  3. Pakistan & Terrorism • Terrorism is definitely an everyday issue in Pakistan • On-going internal conflicts • Terrorism incidents consistently making international headline news • Marriott Hotel bombing in September 2008, Islamabad • Pearl Continental Hotel bombing in June 2009, Peshawar • Federal Investigative Agency building in March 2010, Lahore • Western interests often attacked • High number of casualties

  4. Marriott Hotel bombing in September 2008, Islamabad

  5. Pearl Continental Hotel bombing in June 2009, Peshawar

  6. Federal Investigative Agency building in March 2010, Lahore

  7. Attacks by Segment: 1 Jan 2009 – 31 March 2010

  8. So what does this mean for Underwriters? • Location and occupancy therefore become critical • Underwriting factors: • Do the assets attract large crowds? • Is the insured asset well secured? • Is there any metropolitan exposure? • Is the property Western owned or affiliated? • Are the insured assets government owned or have a military involvement? • Is it in anyway related to Religion?

  9. Perception versus Reality • Often the Perception is worse than Reality • There is a tendency by the media to sensationalize these incidents and the situation in Pakistan generally • The media is often guilty of distorting the truth • Leaves the impression that all areas are threatened by Terrorism • However, Pakistan is a large and diverse country • Many areas are unaffected by Terrorist activity • Sometimes it is difficult to distinguish the better risks

  10. Conflict Map

  11. How can Perception be Improved? • Accuracy of information • Aggregate Management • Longitude & Latitude Co-ordinates • Relevance of information • Detailed Security • Input of International Brokers and Risk Consultants • PML and Security Studies • Professionalism • Clear Presentation of Information

  12. Advantage of a Local Market • Risk selection • Enhanced appreciation of local politics and social tensions • Direct access to the business • Language and custom • Speed of service • ACE Pakistan is the only standalone Terrorism market in Pakistan • ACE is the only company in Pakistan with an international financial strength rating of A+

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