Political Violence in the MENA Region - Implications for Insurance Coverage and Future Developments Richard Halstead Hiscox

2 Agenda Hiscox - Key Facts Strengths of the Hiscox Political Violence Team MENA Unrest, why now? Civil Unrest – a growing trend? Egypt – A case study A Problem of definitions Lessons learned A solution Questions?

3 Hiscox – Key Facts Hiscox is an international specialist insurer and reinsurer with a reputation for integrity and quality We are not a mass producer of insurance policies but focus on key areas of expertise and strength Origins dating back to 1901 at Lloyd’s FTSE 250 company, head-quartered in Bermuda 2010 Gross Written Premiums £1.432bn Underwriting a wide range of business and personal risks Over 30 offices in 13 countries Financial Strength

4 Hiscox Political Violence Team Capacity / Security –Maximum Line - USD 100m –Financial Strength Expertise & Appetite –Over 25 years experience –Lead 75% of risks –Knowledge of emerging markets where companies are investing Exceptional Levels of Service –Swift and knowledgeable servicing essential –Empowered underwriters Claims, our ‘Shop Window’ Willingness and Ability to Travel –Understanding clients –Understanding local issues Control Risks –Leading specialist international business risk consultancy –Their technical expertise and advice provide great support to our clients in the event of a crisis

5 MENA Unrest, Why Now? STRUCTURALCONTINGENT FOOD PRICES POPULATION GROWTH YOUTH BULGE (YOUTH) UNEMPLOYMENT INFORMATION ENERGY PRICES PSYCHOLOGY ELECTIONS DYNASTIC SUCCESSION AUSTERITY GOVERNANCE GLOBALISATION

6 MENA Unrest SIGNIFICANT UNREST / VIOLENCE Tunisia Egypt Libya Syria Yemen DISTURBANCES / ASSOCIATED UNREST Bahrain Algeria Jordan Morocco Saudi Arabia

7 Civil Unrest - A growing trend? THAILAND 2010: $500M-$1BN TUNISIA 2011: $150M EGYPT 2011: $200M LONDON 2011: $150M - $250M

8 Egypt – Case Study Riots, Strikes, Civil CommotionUprising / InsurrectionRevolution 25th January, protests begin “Day of Revolt” 11th February – Mubarak resigns 28th January, violence intensifies “Friday of Anger” 2nd February, running battles between opposing elements in Tahrir Square

9 A Problem of Definitions... 1: Civil Commotion – “a substantial disturbance of the public peace by three or more persons assembled together acting with common intent” 2: Insurrection – “a violent uprising of citizens in resistance to their government” 3: Revolution – “the overthrow of a regime or political system by its citizens”

10 Lessons Learned Focussed on cities Target locations: Retail, Government Buildings, Consumer Goods, Banks, Hotels – ‘Street Front’ Exposure Fluid process including: Looting / Riots / Strikes / Protests / Civil disobedience – Proximate cause? Questions over cover under property policies LMA3030 Terrorism policy: exclusionary language clear ‘civil commotion assuming the proportions of or amounting to an uprising.’

11 A solution... Hiscox PV Cover Terrorism and/or sabotage Malicious damage Riots, Strikes, Civil Commotion Invasion Rebellion Revolution Coup d’etat Insurrection Mutiny Civil war War

12 Any questions?