Widening CBRN protection gap for insurers, warn Geneva Association, IFTRIP

The global re/insurance industry faces growing exposure to chemical, biological, radiological and nuclear (CBRN) risks, with existing market structures unable to close a widening protection gap, according to a new report from the Geneva Association and the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP).

CBRN incidents are rare but their consequences can be uniquely catastrophic, the study warns. Emerging technologies, from drones to bioengineering, are reducing barriers for violent non-state actors to access or weaponise CBRN materials, while geopolitical tensions are amplifying the threat.

“CBRN events have the power to destabilise societies and economies in ways few other threats can,” said Jad Ariss, managing director of the Geneva Association. “Strengthening resilience will demand greater dialogue and cooperation between governments, insurers, national pools and international policymakers.”

The report notes that while conventional terrorism losses are increasingly modelled and insured, most property and casualty contracts exclude CBRN risks.

Even where limited coverage exists – such as in national terrorism pools or nuclear industry mutuals – limits are low and exclusions broad. The report warns that in the event of a large-scale incident, the financial burden would fall largely on governments, risking fiscal strain and macroeconomic instability.

CBRN terrorism accounts for less than 0.25% of attacks globally since 1970, but recent cases highlight the persistence of the threat.

Arrests in Europe in 2022 and 2023 involved plots using ricin and cyanide, while advances in synthetic biology have raised concern about future biological attacks. The UK government has already warned it considers a successful terrorist CBRN attack “likely by 2030”.

Historical examples underscore the potential scale of economic fallout. The Fukushima nuclear disaster in 2011 produced estimated damages of $210bn, while the Chernobyl accident generated macroeconomic losses of $235bn for Belarus alone.

Even much smaller incidents, such as the 2018 Salisbury Novichok poisonings, carried costs exceeding £150m, mainly linked to business disruption and decontamination.

“CBRN hazards produce widespread dread within societies, which can have extensive macroeconomic and environmental effects even without mass casualties,” the report notes.

Looking ahead, the study sets out several recommendations. IFTRIP members are urged to share best practices on alternative funding arrangements and terrorism risk modelling.

The authors call for exploration of cross-border risk-sharing similar to nuclear liability conventions, although they concede that varying national frameworks remain a barrier.

Finally, they stress the importance of dialogue between insurers, pools and international policymakers to design innovative mechanisms for risk transfer.

Steven Seitz, IFTRIP chair and director of the US Federal Insurance Office, said that while the sector cannot underwrite away the entire CBRN threat, it can take steps to avoid devastating financial consequences.

“By acting now, the global re/insurance community can help mitigate CBRN risks and ensure that future incidents do not result in massive economic dislocation,” he added.