{"id":10085,"date":"2025-07-09T09:02:03","date_gmt":"2025-07-09T09:02:03","guid":{"rendered":"https:\/\/www.advantagego.com\/en-us\/?p=10085"},"modified":"2025-07-09T09:05:17","modified_gmt":"2025-07-09T09:05:17","slug":"pvt-market-shows-resilience-amid-rising-geopolitical-threats","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/pvt-market-shows-resilience-amid-rising-geopolitical-threats\/","title":{"rendered":"PVT market shows resilience amid rising geopolitical threats \u2013 Allianz Commercial\u2019s Todorovic"},"content":{"rendered":"\n

Allianz Commercial\u2019s Srdjan Todorovic discusses market maturity, exposure management and terrorism trends in an evolving risk landscape<\/strong><\/em><\/p>\n\n\n\n

The political violence and terrorism (PVT) insurance market has experienced a transformative few years. From uprisings in Latin America to conflicts in Eastern Europe and the Middle East, geopolitical volatility has shaped underwriting conditions and claims activity in profound ways.<\/p>\n\n\n\n

Srdjan Todorovic, Head of terrorism and hostile environment solutions at Allianz Commercial, believes this evolving risk landscape is challenging the notion of market maturity \u2013 even as new capacity re-enters and lessons from past losses continue to inform underwriting.<\/p>\n\n\n\n

\u201cThere is maturity in the market, but it doesn\u2019t extend to everyone or every corner,\u201d Todorovic says.<\/p>\n\n\n\n

\u201cWith it being a market, it is open to economic forces just like any other. More established markets are in different internal cycles to the relatively new joiners. This means a lot when it comes to competitive practices and pricing.\u201d<\/p>\n\n\n\n

He identifies key inflection points over the past six years \u2013 Chile, South Africa, Ukraine, and most recently the Israel-Gaza-Lebanon conflict\u2014as having shaped the current market mindset.<\/p>\n\n\n\n

\u201cEven with the experience gained from this period, there are now more companies writing standalone PVT than ever before,\u201d he says.<\/p>\n\n\n\n

\u201cI would estimate that capacity is nearly back to pre-Ukraine levels.\u201d<\/p>\n\n\n\n

According to Todorovic, the events of recent years have demonstrated the market\u2019s resilience.<\/p>\n\n\n\n

\u201cWhat we have learnt from the last six years is that there is resilience in the PVT market for medium to medium-large events,\u201d he says.<\/p>\n\n\n\n

\u201cDespite the fear of World War III and certain other regional conflicts, the capacity to continue writing this class is still very much there.\u201d<\/p>\n\n\n\n

Managing accumulations and contingent exposures<\/strong><\/p>\n\n\n\n

Exposure and portfolio management<\/a> are central to underwriting PVT, a line of business<\/a> that relies more on judgment than on mature data models.<\/p>\n\n\n\n

\u201cThe PVT market has settled one standard approach to terrorism and sabotage,\u201d Todorovic explains.<\/p>\n\n\n\n

\u201cThis is with a defined blast-zone usually without PML methodology.<\/p>\n\n\n\n

\u201cFor SRCC [strikes, riots and civil commotion], there has been a shift to country-wide aggregation and accumulation monitoring. This has shifted from city level because of the type of countrywide incidents since 2019, such as Chile, Colombia, France, South Africa and BLM.\u201d<\/p>\n\n\n\n

However, for certain perils, challenges remain.<\/p>\n\n\n\n

\u201cFor contingent exposures, there is great difficulty in monitoring true accumulation, which is a problem across property classes.\u201d<\/p>\n\n\n\n

These constraints make disciplined underwriting essential<\/a>, particularly as a global wave of instability continues to impact policyholders.<\/p>\n\n\n\n

Underwriting discipline in a soft market<\/strong><\/p>\n\n\n\n

While geopolitical risks have intensified \u2013 from extremist terrorism to state-sponsored sabotage \u2013 Todorovic points out that the PVT market remains relatively soft.<\/p>\n\n\n\n

But he rejects the notion that this is unusual.<\/p>\n\n\n\n

\u201cI wouldn\u2019t say that this is odd,\u201d he says.<\/p>\n\n\n\n

\u201cI appreciate we are talking about two very different sized markets, but property underwriters continue to write natural catastrophe risk despite past losses.<\/p>\n\n\n\n

\u201cThe last six years and further the past 24 years have shown that the market is profitable despite these events.\u201d<\/p>\n\n\n\n

He also notes that market participants are improving their own resilience.<\/p>\n\n\n\n

\u201cThere is better defined appetites too, following the recent turbulence.<\/p>\n\n\n\n

\u201cTo add to the experience and a better-defined appetite, insurers have also redefined their reinsurance programmes to hopefully be better fit for their portfolios.\u201d<\/p>\n\n\n\n

Todorovic highlights another structural factor that helps support profitability.<\/p>\n\n\n\n

\u201cThere is a significant miss factor as PVT covers are not bought by all clients which buy property all risks insurance,\u201d he says.<\/p>\n\n\n\n

\u201cThere are also covers which are shared across line of business, with PVT often acting as backstop to gaps in limit or cover for the \u2018all-risks\u2019 classes. Don\u2019t forget, this was the reason it was established after 9\/11, to fill a shortfall in terrorism coverage.\u201d<\/p>\n\n\n\n

Still, he cautions that the peril environment is \u201cvery real and tangible\u201d, and underwriters are responding accordingly.<\/p>\n\n\n\n

Election risks, sabotage, and the intelligence challenge<\/strong><\/p>\n\n\n\n

Despite warnings that 2024 would be a \u201cSuper Year of Elections\u201d, Todorovic says losses did not emerge directly from political polls.<\/p>\n\n\n\n

\u201cThere were some losses in the SRCC space but not directly linked to elections,\u201d he says.<\/p>\n\n\n\n

\u201cMost of the losses were linked to political policy changes, for example in New Caledonia and Kenya.\u201d<\/p>\n\n\n\n

Elsewhere, rising ideological extremism has translated into terrorism threats.<\/p>\n\n\n\n

\u201cOther growing concern is the far right and Islamist terrorism threat on the continent of Europe,\u201d he says.<\/p>\n\n\n\n

\u201cThe largest [attack] being Moscow Crocus City Hall, although I don\u2019t think that this was insured due to sanctions issues.\u201d<\/p>\n\n\n\n

These events impact not only the PVT market but also related areas like event cancellation insurance.<\/p>\n\n\n\n

Another trend he flags is sabotage, particularly involving strategic infrastructure.<\/p>\n\n\n\n

\u201cStrategic offshore assets, such as power production, pipeline and telecommunication. There have been relatively few insured losses in the PVT market, but the risk is on our radar following a big shift in grey space tactics from state actors.<\/p>\n\n\n\n

\u201cThe underwriting around these types of risks is certainly enhanced and capacity reduced.\u201d<\/p>\n\n\n\n

As for how PVT as a discipline is evolving, Todorovic emphasises that judgment and experience remain paramount.<\/p>\n\n\n\n

\u201cPVT is a relatively junior market, and we learn from every loss, event or near miss,\u201d he says.<\/p>\n\n\n\n

\u201cData is very limited, so this is why experience, and a clear line size and underwriting strategy and appetite, are fundamental.<\/p>\n\n\n\n

\u201cAs with infancy of every market and line of business, pooling of risks is fundamental to its survival and longevity.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Allianz Commercial\u2019s Srdjan Todorovic discusses market maturity, exposure management and terrorism trends in an evolving risk landscape The political violence and terrorism (PVT) insurance market has experienced a transformative few years. From uprisings in Latin America to conflicts in Eastern Europe and the Middle East, geopolitical volatility has shaped underwriting conditions and claims activity in […]<\/p>\n","protected":false},"author":8,"featured_media":10086,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[7,26],"tags":[34,35,10,14],"line-of-business":[30,31],"class_list":["post-10085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","category-latest-insights","tag-exact","tag-exact-max","tag-exposure","tag-underwriting-workbench","line-of-business-political-risk","line-of-business-terrorism"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=10085"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10085\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/10086"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=10085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=10085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=10085"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=10085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}