24 July 2018

Motor-related terrorism

The LMA believes the vote of the UK Motor Insurance Bureau’s members to mutualise the risk arising from motor-related terrorism is a very welcome development, both for primary UK motor insurers and for their reinsurers.

Such risks are inherently difficult to price and reinsure due to their low frequency and high severity, but the old system, via a circuitous legal route, could have handed enormous, potentially destabilising liabilities for such losses onto a single insurer.

The LMA’s members believe that motor terror risk cannot be significantly mitigated by careful risk selection, so a mutualised solution is the best approach. It will distribute the cost of funding complex and unpredictable losses fairly across the entire motor market.





David Powell
Head of Non-Marine Underwriting