Terrorism, political violence and other malicious acts differ from other insurable perils in that they are dynamic and adaptive; there is human intent driving the probability and willing the impacts to change. Historic incidents show past trends, but those are only partial drivers of future trends as terrorists adapt their tactics in response to past effectiveness and current circumstances.
As the region hit first by COVID-19, many countries in Asia-Pacific experienced a sharp rise in economic risk early in the year. Almost two-thirds (64 percent) of the countries rated by Guy Carpenter-affiliate Marsh JLT Specialty’s World Risk Review (WRR) experienced an increase in their country economic risk rating of more than one, between January and July 2020. In the same period in 2019, no country posted a rise of this magnitude. Only 23 percent of countries posted any increased economic risk.
While states such as China, South Korea, and Vietnam have received praise for their domestic handling of COVID-19, others have struggled to bring it under control. Despite an early lockdown, cases in India continue to rise, contributing to one of the largest increases in economic risk in the region.
Below, Marsh JLT Specialty provides an update on the region’s largest economies, China and India, along with Vietnam, a country that may benefit in the long term from other countries’ likely efforts to reduce their dependency on Chinese manufacturing.
The challenge in creating a terrorism risk model is achieving sufficient precision and refinement of each module to make the model credible – particularly the hazard module, because of the changeable and dynamic nature of the peril. Guy Carpenter’s proprietary terrorism model, Sunstone™, contains over one million global targets, probability matrices for eight different regions and reflects the full spectrum of attack types from large catastrophic events to lower level, more frequent events.