The social and economic impacts of political violence don’t often match. Terror attacks can accomplish their main objective of striking fear into a local population while not significantly interfering with commerce, and broad waves of unrest have the potential for supply chain disruption, local business closures lasting for days, and repair and remediation that can become quite costly. There’s a third category that doesn’t get enough attention in policy and academic circles: insurance industry losses.
Historically, political violence has not led to large losses for the insurance industry. According to historical losses in PCS Global Terror, only three events have posted aggregate insurance industry losses of at least US$1 billion (not adjusted for inflation) since at least 1992, with the terror attacks of September 11, 2001, far in excess of that and thus an outlier. For riot and civil disorder, only two U.S. historical events have topped US$100 million in the past 70 years, with only one major riot in Latin America reaching that threshold in the past 20 years.