From: Captive Intelligence
- Political violence not a common line written through captives
- Sharp focus on 1.1 renewals as hardening PV market reduces capacity and tightens coverage
- More buyers may use their captive to show reinsurance markets they have skin in the game
Global instability, largely caused by Russia’s invasion of Ukraine, could lead to insurance buyers seriously assessing the feasibility of writing political violence risks (PV) through their captives for the first time.
One broker indicated that some larger clients have already started enquiring about writing political violence risks through their captives.
Historically, PV has not been commonly written through captives due to the cover being a low frequency, high severity line.
PV can be purchased on a standalone basis or as part of full political risk cover. Political violence cover is also typically non-cancellable and covers property damage and resulting business interruption losses following war, civil commotion and terrorism.
If insureds purchase full political risk insurance, it usually provides political violence insurance alongside a number of other perils such as forced divestiture of assets or deprivation.