According to Chaucer, the rise in the number of protests has generated increased interest in Strikes, Riots and Civil Commotion Insurance (SRCC) insurance, a special category of cover which protects businesses against losses incurred due to protests and other civil unrest.
Increases in large protests have been notable across Europe, as well as the Middle East and Africa. The number of large protests in Europe increased 71%, averaging 92 annually from 2000-2009 and 157 from 2010-2019. Average annual figures for the MENA (Middle East and North Africa) region increased by 229 % (22 to 72 per annum), while those for sub-Saharan Africa increased by 48% (59 to 88 per annum).
The effect of the Global Financial Crisis on public finances led to austerity measures in many economies ranging from spending cuts and reductions in subsidies to tax increases. Political opposition manifested in popular movements and street protests from the indignados in Spain and gilets jaunes in France to the Occupy movement in the US and elsewhere.
More recently the Black Lives Matter movement has led to large number of protests in the US and more widely across the globe. Chaucer analysis of US protest data has found that the number of large protests jumped 156% last year from 2,553 to 6,545, driven by the Black Lives Matter movement.
Germany, which in the last decade has experienced sizeable protests on issues including EU austerity measures and anti-immigrant feeling, saw the largest increase in protests of major European economies. Numbers jumped from an average of 4.7 per year (2000-2009) to 16.3 (2010-2019), an increase of 247%. Over the same period France saw the 2nd largest increase and the second highest number of large demonstrations (from 7.1 annually to 14.8 – 108%).
As a result of the Global Financial Crisis, some developing economy saw drops in exports, aid and capital inflows. This led to unsustainable public finances and unpopular cuts in public spending and subsidies. The last decade saw the Arab Spring spread across the Middle East and North Africa, as well as a steady increase in protests around economic issues in sub-Saharan Africa.
These included unrest in Nigeria, related to fuel prices and security issues, and South African protests about student fees and wage freezes.
Last year the Coronavirus pandemic (Covid-19) led to the largest economic contraction since the Great Depression, adding to the stresses on the world’s economies, still recovering from the Global Financial Crisis. The evidence of the last decade suggests that more political unrest arise in the coming years in the wake of Covid-19.
Andrew Bauckham, Head of Political Violence & Crisis Management at Chaucer says, “These figures clearly show an increase in political unrest in the post-financial crisis world. When times are tough, anger invariably mounts against governments and elites, which spills over into protest and civil unrest.”
“Increasing incidents of civil protest has led some international insurers to exclude damage caused by protests and unrest from mainstream insurance. This process of removing cover was accelerated by the increase in global protests after the Global Financial Crisis.”
“This has created the need for a specific class of insurance that banks, retailers, leisure operators, real estate funds and other businesses can buy to make sure they are covered for what can be very major losses.”
As a consequence of finding themselves without cover for damage caused by protestors, businesses and homeowners are increasingly turning to specialist SRCC insurance to supplement their standard policies. Failure to do so could potentially be costly.
According to the Insurance Information Institute, the Black Lives Matter protests between May 26 and June 8 of 2020 are estimated to have cost US insurers between $1-2billion.
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