Geneva Association reviews insurance responses to chemical and nuclear risks

The potential losses from a major CBRN event are so large and unpredictable.

The threat of chemical, biological, radiological, and nuclear (CBRN) incidents, particularly from terrorism, remains a growing concern for policymakers and the re/insurance sector, according to the Geneva Association.

Although such events are rare, geopolitical tensions, technological advances, and increasingly capable violent non-state actors (VNSAs) are raising the risk level, the association’s report “Insurance and Chemical, Biological, Radiological, and Nuclear Risks” said.

The potential losses from a major CBRN event are so large and unpredictable that most property and casualty (P&C) policies exclude or heavily sublimit coverage. 

To address this, risk-sharing arrangements have been created to pool CBRN exposures across public and private entities. 

However, a significant incident could still leave victims facing financial hardship and force governments to bear heavy recovery and compensation costs, potentially straining public finances.

The report reviews recent changes in the CBRN threat environment, the current insurance and reinsurance arrangements for malicious CBRN attacks, and the gaps that remain in national re/insurance pools.