In our continuing series of questions from the AXA Campus course, Julian Hall tests your knowledge of terrorism

This week's questions come from the AXA Campus course: Terrorism.This course is of interest to anyone who deals with risks requiring terrorism cover or is seeking to update his knowledge of this subject.

Before the 1980s terrorism was not an issue that concerned insurers greatly. It did not matter whether a fire or explosion was caused by the actions of a terrorist or an arsonist, or came about naturally. If damage to insured property was caused by an insured peril there was cover in force.

In the 1980s and 90s Irish terrorist groups began bombing the UK mainland as a means of advancing their political aims. This culminated in the St Mary Axe and Canary Wharf blasts in London, which caused both major loss of life and property damage.

Losses for both UK insurers and reinsurers ran into many millions of pounds. As a result the insurance industry felt that it could no longer afford to cover the entire consequences of such incidents.

The government had borne the risk of terrorism damage in Northern Ireland since the 1980s. The UK insurance and reinsurance industry lobbied the government with the aim of having a government-backed reinsurance pool available to cover all but the smallest terrorist incidents in England, Wales and Scotland.

Hence after much discussion, the government set up the Pool Reinsurance Company (Pool Re) under the Reinsurance (Acts of Terrorism) Act 1993. Pool Re is a government-backed mutual reinsurance pool.

AXA Campus is an ideal learning tool as it provides over 350 courses and incorporates tailored versions of CII ed LEARN and ed ASSESS (AXA ed). This relationship provides a natural fit between the soft and technical learning material of AXA Campus and the qualification and compliance aspects of AXA ed.

The materials and questions for this course are supplied to AXA Insurance by Searchlight Solutions.

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Course objectives

  • Demonstrate an understanding of how terrorism cover has developed
  • Explain recent changes in market practice in relation to terrorism insurance.
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