August 6th, 2009

Global Terror Update: Middle East

Posted at 1:00 AM ET


The Arab War Risks Insurance Syndicate (AWRIS) was established in 1981 to provide war cover during the Iran-Iraq War, with an emphasis on defending the insurance companies situated in the Middle East. Based in Bahrain, AWRIS is a syndicate of approximately 110 member insurance and reinsurance companies from 18 Arab countries. The member companies share the retention with quota share and aggregate excess of loss reinsurance placed in London. AWRIS provides insurance for risks under the categories: “War — Cargo,” “Commercial and Aviation Hull,” “Terrorism and Sabotage of Fixed Assets,” “Transported War — Cargo by Road” and “War — Liability.”


Israel has two government-backed programs providing property-casualty and life and health insurance. Primary insurance policies only cover risks for damages not covered by the government-backed funds.

The Victims of Hostile Action (Pensions) Law (VHAP), established in 1970, provides compensation for bodily injuries suffered in terrorist attacks, as well as compensation to family members of deceased victims. According to this law, victims of terror attacks and their families (regardless of when they receive Israeli citizenship) are entitled to financial compensation from the State of Israel.

The Property Tax and Compensation Fund Law (PTCF), established in 1961, provides compensation for property damage caused by terrorism. Through the fund, the government compensates for any loss of property resulting from a hostile act at market value. Unlimited cover (actual damage plus costs of mitigating damage) is provided for direct damage to property. Up to EUR20,000 (USD28,000) is covered for household contents. Additional coverage for household contents can be purchased at 0.3 percent of the property value, up to a limit of EUR140,000 (USD1960,000). 

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