Demand among industrial companies for property insurance against terrorist attacks is growing

Insurers note a significant increase in demand for insurance against terrorist attacks among corporate clients in the Russian Federation. The recent events with the mass attack of drones in Moscow will only spur interest, experts believe. The main demand comes from industrial companies, while citizens rely on government assistance. The market admits that eventually this type of insurance will become mandatory.

Demand for property insurance against terrorist attacks among industrial companies has grown, Alexander Gulchenko, chairman of the supervisory board of the Russian anti-terrorist insurance pool, told RIA Novosti on May 30. Citizens do not yet have mass interest in such products, he specified. According to the Ministry of Defense, this morning Ukraine launched a terrorist drone attack on facilities in Moscow. Eight aircraft-type UAVs were involved: five were shot down from an anti-aircraft gun complex in the Moscow region, three were suppressed by electronic warfare and deviated from their intended targets. Later the Investigative Committee of the Russian Federation declaredthat a criminal case has been opened on the attack.

According to Oleg Khanin, General Director of the insurance broker Soyuz Insurance, since February 2022, the demand of corporate clients for insurance services against terrorist attacks has increased by 36%. Independent expert Andrei Barkhota speaks of an increase of 30-50%. For corporate clients who regularly renew insurance contracts, demand growth is 5–10% in “quiet” areas and up to 50–75% in border areas, said Alexander Tsyganov, professor at the Financial University under the Government of the Russian Federation.

“The situation is influenced by both the general situation and real events not only in the border areas, but already in Moscow. Information about large fires, which can also be caused by deliberate arson or terrorist attacks, affects to some extent. There is also a sad fact – the desire to insure property that is not for sale and hope for insurance compensation, ”explains Mr. Tsyganov.

Demand is concentrated among corporate clients belonging to the industrial cluster, which is objectively due to large material losses in the event of terrorist attacks and sabotage at production and industrial facilities. “It should be noted that the losses in the relevant insured events are well settled, and the tariffs have not yet increased too much,” explains Mr. Barhota.

Demand for such insurance among citizens is low, due to “the lack of relevant stories on the absorption of risks and the continuing belief that the growth of the terrorist threat is a temporary phenomenon,” the expert notes. Citizens largely rely on the help and responsibility of the state, while entrepreneurs and enterprise management understand that one can hope for help, but insurance is often more effective, Mr. Tsyganov adds.

According to experts, the demand for insurance against terrorist attacks will grow. Given the dynamics of the last month, “we expect a further increase in demand, especially in the border regions of Belgorod and Rostov,” said Mr. Khanin. At the same time, Mr. Gulchenko emphasized that this is a voluntary type of insurance, but Russian legislators have already raised the issue of transferring it to the category of mandatory.

Julia Poslavskaya