Grasp SRCC risk accumulations: Swiss Re

As geopolitical tensions globally rise, strike, riot and civil commotion (SRCC) claims are expected to surge, highlighting the need for re/insurers to get a proper grasp on risk accumulations for ensure accurate pricing, top property and casualty (P&C) executives at Swiss Re have cautioned.

“Over the last 20 years, we have seen a 3 000% increase in the number of claims for SRCC,” Nikhil da Victoria Lobo, Swiss Re’s head of P&C reinsurance for Western & Southern Europe and Middle East & Africa, told a media briefing ahead of the 2024 Baden-Baden reinsurance conference.

The session, which took place on September 16 and was called “How a volatile environment and elevated risks are creating challenges and opportunities for the re/insurance industry in Europe” also featured Leopoldo Camara, head of P&C reinsurance Northern, Central & Eastern Europe; Jens Mehlhorn, head of property underwriting EMEA; Patrick Roder, head of casualty treaty underwriting EMEA; and Jimmy Keime, head of engineering & nuclear.

Lobo warned that escalating geopolitical tensions will further increase SRCC claims, a key coverage in property, commercial, and sometimes residential policies. He stressed the need for the industry to better understand risk accumulations to ensure adequate pricing.

“Making a broad-brush statement about whether it’s underpriced is challenging.”

Currently, global pricing for the peril is “challenging” due to variances in localised coverage, Lobo indicated. He added: “One of the challenges here is that, as a marketplace, it’s not a uniform coverage—it’s country by country. There’s great variability.”

“By its very nature, the risk is highly idiosyncratic, country by country. So, making a broad-brush statement about whether it’s underpriced is challenging.” 

Referencing the May 2024 New Caledonia riots, Lobo noted that the event “was a surprise for many people in the industry”, due to its location and the more than €730 million in insured losses.

“The other piece to highlight here is that SRCC claims and geopolitical instability can occur in locations where it’s unexpected,” Lobo noted, recommending that preventive measures, along with broader civil society, be developed to reduce volatility and mitigate these risks.

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