Terrorism Reinsurer Warns That Virus Brings New Threats

By Najiyya Budaly
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Law360, London (May 12, 2020, 11:20 AM BST) -- Britain's terrorism reinsurer has warned that the COVID-19 pandemic has led to propaganda spreading online, as extremists attempt to take advantage of governments made vulnerable by the crisis.

Pool Re, which is backed by the government, said Monday that the spread of the coronavirus is having a significant impact on terrorism across the globe. The reinsurer, which covers insurers against costly payouts for losses from terrorist attacks, said in a report that it expects the spread of extremist propaganda to incite some incidents during the pandemic.

Lockdown measures will inhibit some attacks, the reinsurer said in the report co-authored with Andrew Silke, professor of terrorism, risk and resilience at Cranfield University in central England. But far-right propaganda, which focuses on conspiracy theories connected to COVID-19, has the potential to inspire plots and attacks.

"We are quite rightly focussed on the near-term issues and human and economic devastation being caused by this global pandemic," Ed Butler, chief resilience officer at Pool Re, said Monday. "However, Pool Re's core purpose remains the provision of terrorism reinsurance, and we need to continue to understand the contemporary terrorist threats."

The report shows that there is a significant increase in online extremist activity. This means that there is a risk of radicalization, Pool Re said.

The authors said they are concerned that countries weakened by the economic damage caused by the virus will be more vulnerable to the emergence of terrorist groups.

"Many terrorist groups have also flagged that the pandemic has left government and security resources being severely stretched," Prof Silke said. "As a result, the ability of government, intelligence and law enforcement agencies to focus on traditional priorities such as counterterrorism has been undermined."

Pool Re was established in 1993 after the insurance market was rocked by an Irish Republican Army bombing on London's Baltic Exchange. The attack scared global insurers away from offering terrorism coverage, so the government asked the insurance industry to set up a company with an unlimited loan agreement from the Treasury to fill the gap.

The U.K.'s insurance industry, led by the terrorism reinsurer, is working to find a common response to the surge in virus-related claims, including potential plans for a pandemic reinsurer.

Pool Re underwrites more than £2 trillion ($2.4 trillion) of exposure in commercial property across the U.K. mainland and has paid out claims of more than £600 million without using taxpayer money. It is owned by the insurance industry but HM Treasury is planning to fold the reinsurer into the government.

Editing by Ed Harris.

For a reprint of this article, please contact reprints@law360.com.

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