Global analytics and data provider Verisk has released a new catastrophe model to help insurers quantify the financial impacts of strikes, riots and civil commotion in the US.

The Verisk SRCC Model captures frequency and severity across the spectrum of plausible loss-causing unrest across every ZIP Code in the country. It predicts the severity of an event by evaluating the key drivers of risk, including social and economic trends, political factors and historical protest patterns.

The probabilistic model can provide enhanced insight for exposure management and catastrophe modelling teams that have traditionally been reliant on historical, generic civil unrest data and subjective assessments.

“Over recent years, unrest in the US highlighted the necessity for insurers to have a comprehensive understanding of potential political risk hazards,” said Sam Haynes, vice-president of data and analytics, Verisk Maplecroft. “A 1 in 1,000-year SRCC event could cause losses 10 times greater than those from the 2020 protests, while very low-probability SRCC tail events could potentially impact commercial and municipal properties at the ZIP code level nationwide, the majority of which are located in metropolitan areas.”

Since 2010, strikes, riots and civil commotion events have led to more than US$10bn in insured losses globally, compared with less than US$1bn for terrorism. In the past six years, the insurance industry has faced five events, each causing over US$1bn in global insured losses. Verisk’s new SRCC model was built to enhance the way underwriters and risk managers approach the increasing risk posed by SRCC events in the US, which has experienced approximately US$3bn in insured losses.

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