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Assessing Violent Risks: How Terrorism Affects the Bottom Line in
Financial Services
20th May 2005
Impact on Financial Markets
Exclusive Analysis:
Political Environment
Domestic Economic & Corporate
Performance
Global Market Drivers
Impact on Financial Markets
Targets not always victims
Flight of Expertise; Expats
Increased security costs, insurance premium and time
Disruptions to the supply chain
Consumer confidence, spending patterns and costing assumptions
Impact of Violent Risk on Profitability
Can very large losses be avoided or passed on?
What is the role of informed pricing?
Political Risk Forecasting and Insurance/Reinsurance
Strategic intelligence company which forecasts violent and political risk
Make the Future Intelligible, Predictable and Profitable
400 analysts and specialist sources worldwide with a
London based editorial team
Run Global Indexes, including Lloyd’s Cargo Watch List
Proprietary Model for Realistic Disaster Scenario Planning
Introduction to Exclusive Analysis
INDEPENDENT
Privately owned
No broker ties
TRANSPARENT
Full visibility
Audit trail and
disclosure compliance
FOCUSSED
Forecasting is all we do
Revenue builds
existing company
REPUTATION
Total Client Accountability
Encourage
Discourage Neutral
70% of risks
27% of risks
3%of risks
0 claims Claims (all avoided by EA client):•Filipino power stations attacked•Colombia power station occupied•Banking chain: bomb in Nepal and 2 hoaxes disrupting business in India, Dubai•Banks in Turkey: ten bombs in 6-month period•Saudi company assets: attack on refinery killed 9•Argentinian banks: 2 bomb attacks•Iraqi helicopters: one lost and one forced landing
0 claims
Case Study of EA Advice
War
Civil Unrest
Political Risk
Terrorism
Risk Definitions
NPA Communist attack on Globe Telecom in Hermosa, Bataan
NPA are prepared to extend violence to banks and mining properties
Philippines: Globe Telecoms
Terrorism in Bolochistan: Pipelines Saudi succession and evolving target set Pipelines in Colombia Taxation of foreign energy companies in
Bolivia East Timor Equatorial Guinea Sao Tome Ceyhan-Baku pipeline
Energy
Oil from Caspian Sea through Azerbaijan, Georgia, Eastern Turkey to the Mediterranean Sea and then on to Western markets.
Strengthening of undemocratic regimes
Further civil unrest
Ceyhan-Baku Pipeline (BTC Project)
Banking
Banks
Suicide bombings 2003 in Istanbul
Al-Qaeda and a Turkish militant group (Great Eastern Islamic Raiders’ Front)
4 small bombs in Ankara outside HSBC branch 2004
HSBC announced it is to stay despite risk of further attacks
Banks – HSBC Attacks
Rioting in Mbuji Mayi, DR Congo
UDPS has flourished leading to civil unrest
Political mismanagement elevates instability
DR Congo: Mining
World’s main producer of cocoa
May 2005: Operation of Disarmament & Demobilization has been set in motion
Property will remain vulnerable
Ivory Coast: Cocoa Industry
Area with high concentration of tourists
Extensive damage to property
Threat to tourists industry set to increase
Hotels and Hospitality: Kenya Paradise Hotel 2002
Elections: January 2005
Who are the insurgents?
Elections have heightened sectarian and ethnic cleavages
Reintegration of Baathists
Kurdish autonomy
Case Study: Iraq’s Reconstruction
2003 2004 2005
Escalating civil unrest
Hydro carbon Law to destabilize Mesa
Departure of GonzalezAggressive militant protest
Left wing parties increase pressure on governmentEscalating civil unrest
Case Study: Bolivia (Gas)
Assessing Violent Risks: How Terrorism Affects the Bottom Line in
Financial Services
20th May 2005