Canadian Underwriter

Lloyd’s: Canada needs public-private, risk-sharing pool for terror cover

November 28, 2007   by Canadian Underwriter

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Canada needs a formal, public-private, risk-sharing pool to provide businesses with coverage against the risk of terrorist attacks, Lloyd’s of London chairman Lord Peter Levine indicated in a prepared address to The Empire Club in Toronto.
Fighting a spell of the flu and laryngitis, Levine read part of his speech aloud and then turned the podium over to Nicholas Armour, the British consul-general in Toronto. Armour completed reading the rest of Levine’s speech.
In his address, Levine noted Britain, Spain and South Africa each have had a public-private partnership in place for decades. In these partnerships, the commercial insurance market participates in a pool scheme with the government, which acts as the ultimate reinsurer in case of very severe losses.
“More recently Australia, France, Germany and the U.S. have developed their own schemes to deal with terrorism’s more extreme impacts,” Levine wrote in his speech to more than 100 insurance industry and financial services representatives. “Needless to say, Lloyd’s is an active participant in many of these, but Canada is noticeably alone amongst the world’s leading western nations in not having a terrorism pool in place.”
And yet Canada is not immune to the terrorist threats, Levine observed.
“Canada’s risk profile has changed in recent years and while no stranger to terrorism, intelligence suggests that its role is shifting from a hub for fundraising and planning attacks outside the nation for example in the United States to a credible target in its own right,” Levine’s speech indicates. “We are told that, by this year, there were thought to be some 60 groups operating within Canada’s borders that support an extremist jihadi ideology.”

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