UK motor insurers vote to mutualise risks for terrorism claims


Motor insurers underwriting business in the UK have voted to mutualise the risks associated with terrorism claims.

The Motor Insurers' Bureau will deal with all third-party motor claims where terrorists driving vehicles injure or kill people on or after 1st January 2019.

The market will continue to fund MIB through a levy.

UK motor insurers have voted for the MIB to handle and pay the claims from victims involved in a terrorist event where a vehicle is used to kill or injure. MIB is the UK’s not-for-profit body which deals with the claims from victims involved in uninsured and ‘hit and run’ accidents. The compensation for victims of vehicle-related terrorist events that take place on or after 1 January 2019 will now also be handled directly by MIB.

All motor insurers writing business in the UK are members of MIB, which is funded through a levy arrangement.

More than 75% of motor insurers by voting rights agreed the change, following a 28-day ballot which closed on 19th July. As a result, Article 75, the relevant element within MIB’s Articles of Association, has changed to bring these within the scope of the claims paid by the Bureau.

This follows on from the consultation earlier this year where MIB was asked to determine the level of support across the market for a change to be made so that the liability of the Article 75 insurer moved to MIB.

MIB may explore the possibility of reinsuring some of the liability.

Dominic Clayden, Chief Executive at MIB commented on the change, “Those who are innocently caught up in events where terrorists drive vehicles into people to injure and kill, can rely on MIB to pay and handle their motor related claims for these terrible events.”

Steve Maddock, Chairman of MIB and Chief Operating Officer at Direct Line Group said, “The motor insurance market has clearly signalled that it was right to consider if individual insurers or the market as a whole carry the risks associated with motor claims arising from terrorist attacks. The outcome of the vote indicates strong support to mutualise the risk and enable MIB to act in the event there are further terrorist activities. It is a good outcome for the industry and the public and one which is supported by the Department of Transport.”