Despite the horrendous damage caused by the two bomb blasts that ripped through Istanbul last Thursday, killing 28 persons and injuring over 400, the insured losses are not expected to be excessively heavy.
Roger Short, the British Consul General, was killed in the attack on the British Consulate, which destroyed two outbuildings and damaged the main structure. An earlier blast outside the Istanbul office of HSBC caused heavy damage to the building and surrounding areas.
According to news reports from Reuters, U.K. insurers do not expect the blasts to cause heavy losses. A Lloyd’s spokeswoman indicated that the damage at the HSBC building had largely occurred at lower levels and would not constitute a “significant loss.” Both Aviva and Royal & SunAlliance indicated that any exposures they may have would be minimal.
Munich Re had earlier issued a statement indicating that losses were expected to be fairly low, mainly due to the fact that coverage on the properties in Turkey had been at a relatively low level. In addition many primary policies exclude losses from terrorism.
Although the two truck bombs appear to be the work of local Turkish extremists, investigating authorities from the U.K. and Turkey strongly suspect that the international terrorist network, al-Qeada, was also involved. The attacks on relatively “soft” targets underscores the difficulty of preventing terrorists from striking anywhere in the heart of the world’s cities.
As a result costs for terrorist coverage are expected to increase, and more policies may exclude it altogether.
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