Chaucer, a global specialty insurance group, has reported a surge in demand for insurance against cartel-related violence, especially in the LATAM region.
The outbreak of concern follows an uptick of high-profile incidents, across nations such as Mexico and Guatemala, Honduras and El Salvador.
This ‘organised crime cover’ is an add-on to its Strikes, Riots and Civil Commotion (SRCC) policy, safeguarding against physical damages caused by cartels.
Gabriel Mayorga, a political violence underwriter at Chaucer, said: “Our product gives businesses operating in Central America greater certainty in the event that they fall victim to cartel activity. Providing this kind of bespoke coverage is a prime example of how the (re)insurance industry evolves to protect clients, giving them the confidence to operate in regions in which organised crime is prevalent.”
In recent years, organised crime has risen significantly as a threat for businesses across the region, culminating in a cartel-led arson attack on 25 OXXO stores in Western Mexico last year.
The deplorable scenes prompted the Mexican Chamber of Commerce to highlight the the escalating direct threat to businesses from organised crime.
Cartels hold a significant stake in the underground economy. A 2011 report by the United Nations estimated that worldwide proceeds from drug trafficking and cross-border organised crime is equivalent to 1.5 per cent of global GDP, or $870bn.
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