Demand for Cartel Insurance increases significantly across the LATAM region
Chaucer , a global specialty (re)insurance group, reported a surge in demand for insurance against cartel-related violence, especially in the LATAM region, due to rising high-profile incidents. This ‘organized crime cover’ is an add-on to its Strikes, Riots and Civil Commotion (SRCC) policy, safeguarding against physical damages caused by cartels in countries like Mexico and Guatemala.
Cartels have severely impacted businesses in Central America. In 2018, cartels stole $3 billion in fuel annually in Mexico alone. Recently, areas like Cancun, usually safe from such violence, have seen an uptick in cartel activity, increasing demand from hotel operators.
Gabriel Mayorga, a political violence underwriter at Chaucer, noted heightened interest in this insurance from the retail sector and regional hotel chains. Moreover, following a cartel-led arson attack on 25 OXXO stores in Western Mexico last year, the Mexican Chamber of Commerce highlighted the escalating direct threat to businesses from organized crime.
“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.” – Gabriel Mayorga.