Demand for strikes, riots and civil commotion insurance rises as large protests jump: Chaucer

A significant surge in the number of large protests and demonstrations globally has generated increased interest in strikes, riots and civil commotion (SRCC) insurance, a special category of cover which protects businesses against losses incurred due to protests and other civil unrest, according to a study by specialist Lloyd's re/insurer  Chaucer.

At the same time, this rise in incidents of civil protest has led some insurers to exclude damage caused by protests and unrest from mainstream insurance, Chaucer said.  As a consequence of finding themselves without cover for damage caused by protestors, businesses and homeowners are increasingly turning to specialist SRCC insurance to supplement their standard policies. Chaucer warned that "failure to do so could potentially be costly" as more political unrest is likely to arise in the coming years in the wake of Covid-19.

According to the re/insurer's report, mass protests and demonstrations surged 36 percent globally in the last decade following the 2008 financial crisis, most notably across Europe, as well as the Middle East and Africa (MENA).

The number of large protests in Europe increased 71 percent, averaging 92 annually from 2000-2009 and 157 from 2010-2019. Average annual figures for the MENA region increased by 229 percent (22 to 72 per annum), while those for sub-Saharan Africa increased by 48 percent (59 to 88 per annum).

Within Europe, Germany and France saw the largest increases, up 247 percent and 108 percent, respectively.

Issues such as reductions in subsidies, tax increases, political opposition, and more recently Black Lives Matter (BLM) movement led to a large number of protests widely across the globe.

In the US, large protests jumped 156 percent last year, driven by the BLM movement. According to the Insurance Information Institute, the BLM protests between May 26 and June 8 of 2020 are estimated to have cost US insurers between $1-2billion.

Last year the Covid-19 pandemic led to the largest economic contraction since the Great Depression, adding to the stresses on the world’s economies, still recovering from the Global Financial Crisis.

Andrew Bauckham, head of political violence & crisis management at Chaucer, said: “These figures clearly show an increase in political unrest in the post-financial crisis world. When times are tough, anger invariably mounts against governments and elites, which spills over into protest and civil unrest.”

“Increasing incidents of civil protest has led some international insurers to exclude damage caused by protests and unrest from mainstream insurance. This process of removing cover was accelerated by the increase in global protests after the Global Financial Crisis.”

Bauckham noted: “This has created the need for a specific class of insurance that banks, retailers, leisure operators, real estate funds and other businesses can buy to make sure they are covered for what can be very major losses.”

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