Major malls higher-risk targets: Aon

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Major malls higher-risk targets: Aon

Suggests malls include broader selection of tenant types.

Staff on September 29, 2016

Retail across all countries  has always been a higher risk target – particularly major malls, according to Aon’s Terrorism and Political Violence newsletter. But with recent attacks around the world, that risk has intensified.

So far in 2016, TerrorismTracker data shows that there have been at least 177 direct attacks on businesses, 15% of which targeted or directly impacted retail. TerrorismTracker has recorded 26 attacks on retail businesses in 2016. Most of these occurred in Latin America and India, where far-left and revolutionary groups, like anarchists and Maoists are most active. Risk Advisory also recorded attacks in Germany and the Philippines, but the worst single event affecting retail was a truck bombing at a mall in Iraq.

The majority of incidents affecting the retail sector often appear to be the result of attacks aimed at another target – mostly civilians or police – rather than the business themselves. Openness, limited security and dense crowds makes retail areas an attractive target for terrorists intent on inflicting casualties. So far in 2016, Risk Advisory has recorded 502 attacks against ‘public gatherings’ (densely crowded public spaces), of which 249 were in or near retail areas such as markets and malls. Most attacks affecting retail in the last year were bombings or shooting attacks in busy public areas near shops and other retail premises.

TerrorismTracker data shows a strong tendency for far-left and revolutionary groups to avoid civilian casualties compared with other terrorist typologies. Only three of the above mentioned attacks on crowded retail areas were attributable to far-left and revolutionary groups. In 2016 so far, 13% of far-left and revolutionary groups’ attacks targeting businesses have been fatal. Attacks by such groups appear primarily aimed at causing material damage. On 15 March, an anarchist collective claimed responsibility for firebombing three vehicles owned by a prominent appliance retailer in Berlin. The attack resulted in no casualties, but destroyed the vehicles. The perpetrators threatened further similar attacks.

IS claimed the deadliest attack so far this year against retail. On 3, July a suicide – truck bomb blast killed at least 324 people and injured over 200 others at a shopping centre in the Karrada district of Baghdad. The blast and resulting fire completely destroyed the three-storey complex, and many surrounding buildings. Islamist groups, including IS, have called for such attacks in the West. In 2015, two British nationals were convicted of terrorism offences for allegedly plotting a bomb attack at a shopping mall in London.

Aon suggests business interruption exposures always need to be carefully managed by insureds (deductibles, waiting periods), “but this is especially so in the current climate in order to balance appropriate coverage and premium,” reads the newsletter.

It suggests that in emerging markets, shopping malls include a broader selection of tenant types, including banks and foreign and consular offices. “Insureds should anticipate underwriters reviewing tenant types in these geographies in detail to consider asset specific risk. Clients will get the most representative premiums when they are able to illustrate the actual risk (spectrum of tenants) and so their potential exposure.”

It adds that anchor tenants will need to be understood by underwriters as these are the most visibly exposed within the mall as a whole.

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Major malls higher-risk targets: Aon