Autumn 2013

TERRORISMWAR &

The Lockton War & Terrorism division offers dedicated and specialist services encompassing

all aspects of War, Terrorism and Political Violence in the London and Worldwide marketplace.

Coverage is available for Multi-National Programmes, Single Territory Placements and Single

Location Placements as follows:

• Sabotage and Terrorism

• Riots, Strikes, Civil Commotion and Malicious Damage

• Political Violence including Coup D’Etat, Rebellion, War and Civil War

• Terrorism Construction (up to 48 months) including Delay in Start Up

• Third Party Liability and Employee Liability

• Loss of Attraction and Event Cancellation.

After a relatively quiet 2012 as regards new terrorism capacity, 2013 has seen two of the original protagonists of the standalone terrorism market, Stephen Ashwell of XL Insurance and David James of ANV enter the fray once again. With potential line sizes of USD 100m and USD 50m respectively, and another USD 15m from the new terrorism start up at IGI, overall potential London capacity now stands at circa USD 1.8bn. The competition for business and market share has never been greater, and dependent on type of cover, territory and occupancy, we are seeing a further drift downwards in rates as syndicates strive to meet budget expectations.

With new terrorism hotspots springing up all the time in many corners of the globe, terrorism coverage has developed and evolved to respond to differing and more demanding client requirements. These can vary substantially, as can the rating differentials, depending on the nature of an organisation’s operations, and the territories in which it does business.

We wrote this time last year about the dire events in Syria keeping underwriters in a state of alert; but as this report goes to press this has now escalated to a horrific new level with the introduction of chemical weapons, resulting in the continued suffering of the Syrian people with this grotesque turn of events, and deadly change in offensive by Basher al-Assad and the Syrian regime.

The Syrian crisis deepens with more than 100,000 people having been killed and over 1.5m Syrians displaced from their homesteads. The world waits to see whether the United States will strike against the Syrian regime, and indeed which countries will join forces against Basher al-Assad. US President Barack Obama has said that the credibility of the US, its Congress and the international community is on the line over their response to Syria’s alleged use of chemical weapons and Mr Obama is trying to build support in America for punitive military action against the Syrian Government. Speaking in Sweden recently, he said that the world should stick to its own “red line” against the use of chemical weapons, but also making it clear that there would be no US boots on the ground.

Secretary of State John Kerry has stated that the authorization from Congress being sought by the Obama administration to strike Syria is a limited, targeted effort to focus on deterring and degrading the chemical weapons capacity of al-Assad’s regime. Political campaigning is expected to continue with a vote scheduled in the House of Representatives during the week of 9th September.

The UK stance is still uncertain with the Prime Minister David Cameron resisting all-party pressure from MP’s and peers for another Commons vote on whether British forces should join air strikes in Syria, only days after MP’s rejected the PM’s plan to take part and ally with the US. It is likely that

David ChealesHead of War & TerrorismT: 020 7933 2291E: david.cheales@uk.lockton.com

Brendan ScofieldPartnerT: 020 7933 2292E: brendan.scofield@uk.lockton.com

Enhancements AvailableUSD 50m Hiscox syndicate line slip facilityDeletion of the Incorrect Declaration PenaltyDebris Removal and Professional Fees (without sublimit) “Per Occurrence” Limits or Multiple Reinstatements.

Contingent Business Interruption: Ingress/Egress; Failure of Public Utilities; Interdependency Coverage; Customers and Suppliers; Civil /Military AuthorityIncreased Cost of Working Sub-limitsBy-law extension improved to cover cost of site clearance.

The MarketWe have access to in excess of $2.45billion of coverage for any single risk, with little geographical exclusion. Capacity is sought from Lloyd’s syndicates and company markets based in London, USA, Bermuda, Europe, Scandinavia and the Middle East.

Key Company Markets• AXIS• Lancashire• Chartis• Montpelier re• QBE• Inter Hannover• Torus• ACE• IGI

Key Lloyd’s Markets• Hiscox• Catlin• Hardy• Amlin• Talbot• Liberty• Beazley• Chaucer• Pembroke• Brit• Atrium• Ascot• XL• ANV

Mr Cameron will use part of the G20 Summit to set out his plans for the Syrian conflict, and to “seek to continue the diplomatic efforts for the objective of political transition.”

The crisis in Egypt is still very volatile with thousands of ousted President Morsi’s supporters taking to the streets in their largest protest for some time. Earlier this month hundreds of demonstrators died when security forces stormed pro-Morsi camps in the capital due to the Muslim Brotherhood demanding the reinstatement of its leader Mohammed Morsi. Egypt’s chief prosecutor has ordered that the former president stand trial on charges including inciting murder. This order seems to have extinguished any hope of a political revolution that would bring the Brotherhood out from underground and back into the political process.

In North Korea, at the beginning of the year we saw new leader Kim Jong-un flexing his muscles in trying to assert control over his country, and showing South Korea and the rest of the world through his despotic posturing and provocative actions, what North Korea was capable of doing. In March 2013 he vowed to launch a pre-emptive strike against the US and the next day announced that North Korea was withdrawing from the ceasefire with South Korea. However, as quickly as this aggressive behaviour started it finished, with the North withdrawing its ballistic missiles from launch sites, and exiting troops from close to the demilitarised zone.

As regards the rest of the world, we continue to see terrorist and political violence events in the more volatile countries which include Iraq, Colombia, India, Pakistan and Afghanistan. As far as the situation in Afghanistan is concerned the demobilisation of combat troops from the country is still scheduled for 2014, with certain US bases already undergoing this disbandment. Currently the most serious conundrum however, are the troubles in Syria and Egypt, and it is really a waiting game to see how this unfolds, and what action is taken against Basher al-Assad and the regime, and by whom.

A division of Lockton Companies LLPAuthorised and regulated by the Financial Conduct Authority. A Lloyd’s brokerRegistered in England & Wales at The St Botolph Building, 138 Houndsditch,

London, EC3A 7AG, Company No. OC353198. LLP 557i.

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