A category of insurance risk that hardly existed a little over a decade ago has morphed into a meaningful source of losses for the industry.

Claims tied to SRCC — strikes, riots and civil commotion — are emerging as a growing headache for insurers as episodes of unrest increasingly lead to the destruction of property in Western democracies. Howden Re estimates that insured losses related to SRCC soared from negligible levels in 2013 to more than $8 billion between 2020 and 2024.

For a long time, insurers have offered protection against SRCC at no extra cost. However, elevated risk environments mean this is becoming less common and property insurers have begun excluding or restricting cover for SRCC from their policies, according to Cara Brown, deputy head of terrorism and political violence at insurer Chubb.

SRCC coverage is generally bolted on to other insurance policies, though there’s evidence that the rise in such risks is prompting companies to start seeking specific cover. At the same time, Howden Re said already back in 2023 that insurers were starting to charge “significant additional premiums” for SRCC coverage, with retail assets among the most affected.

Viewing the US as a “safe haven is a thing of the past,” he said. That’s because there’s a “policy volatility that now exists,” which can be seen “internally as well as externally.”

It’s a sentiment that’s been playing out in markets, as some institutional investors in Europe look for ways to reduce their exposure to the US.

bloomberg.com - Rich world s growing civil unrest comes with an insurance sting