Specialty MGA has partnered with a US carrier to deploy fresh political violence capacity, reflecting greater appetite for the standalone insurance business, as buyers seek protection from terrorism and civil unrest risks, and reinsurers eye recent SRCC losses with concern for 1/1.
Managing general agent (MGA) Optio has signalled it is deploying more capacity to the booming market for political violence and terrorism (PVT) protection.
The specialty MGA said it had partnered with insurer AM First, which underwrites US property, casualty and accident and health business.
The PVT capacity being deployed by Optio is international, excluding US business, the MGA said.
“I am extremely pleased to announce that we have successfully secured capacity on an exclusive basis to underwrite PVT risks,” said Tom Kennett, UK head of PVT at Optio.
Capacity will be used in conjunction with Optio’s recently-developed digital rating tool, the company said.
Kennett added: “We look forward to working with our new insurer partner in bringing much-needed new capacity to the PVT market at a time of pronounced geopolitical uncertainty.”
In April, a report from re/insurance broker Howden Tiger warned that PVT losses were outstripping natural catastrophe losses in some terrritories, beset by security problems or civil unrest.
In September, reinsurers MAPFRE Re and SCOR both indicated in exclusive interviews to GR for the Monte Carlo Rendezvous, that strikes, riots and civil commotion (SRCC) were a source of reinsurance concern for 1/1 renewals.
The reinsurers pointed to loss activity in 2023, in France in the case of SCOR, and across Latin America for MAPFRE Re, for example.
SRCC risks have been held within insurers’ property all-risks portfolios, rather than bought as standalone PVT, but as the Howden Tiger report emphasised, the standalone market has grown in line with the rise in SRCC events in recent years.
Howden’s PV brokers appeared in a recent episode of The Political Risk Podcast, alongside Hiscox’s head of PV business in Miami, to discuss the threat picture facing Latin America.
“In Latin America, all these countries are like a pressure cooker. One little spark can make everything blow up,” said Mario Andrés Salcedo, head of terrorism and political violence for Latin America, Howden, speaking on The Political Risk Podcast.
“When one day to another you get higher prices of basic food, gasoline, all the basic needs, and the people start not having enough for their day to day budget, then unrest happens and they start rioting against the government,” Salcedo added.