Operating & Financial Review

Developing new markets

Growth in war and terrorism business is often the result of a catastrophic event. In February 2005 former Lebanese Prime Minister, Rafik Hariri, was assassinated by a huge bomb which also caused damage to a number of high profile hotels and commercial buildings. Overnight the market changed.

Amlin has written political risks in the Lebanon for some years, but we have increased this account considerably over the past two. In 2006, Syndicate 2001 led around 70% of the Lebanese terrorism and allied perils business which came to the London market. We provide reinsurance on a facultative (individual risk) basis which supports the local direct market. Insured risks include commercial facilities, light industrial, oil storage facilities and port equipment.

Jason Herriott, our class underwriter, visited the Lebanon shortly after Hariri’s assassination to meet with brokers, cedants and clients, assess the situation on the ground and determine how Amlin could continue to support clients amid the prevailing instability. Indeed, some programmes had been written on an interim basis immediately after the assassination for clients left without cover. He believes it is “particularly important for London insurers to meet our overseas business partners on a face-to-face basis in order to understand the distinctive aspects of the risks we are underwriting in foreign territories”.

War and terrorism underwriting is not unique in that one must assess both the account exposure and perceived risks. Some risks are target, and exposures are modelled in our sophisticated digital mapping software. Other risks are more nebulous and, while we use market intelligence from a variety of expert sources, there is no substitute for underwriter experience. The underwriting team constantly challenges and adjusts its planned scenarios to ensure we offer realistic terms to clients in volatile territories.

Cover against War On Land risk arising in an insured’s own country is a relatively new insurance class. Development of new products allows us to offer business partners the widest available protection; a benefit our Lebanese clients have been quick to embrace following the recent political and social unrest.

One of our key retail clients is AISHTI, the owner of numerous franchises for luxury brands in the prestigious Solidere district of central Beirut.

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