Growing civil unrest in Western democracies comes with an insurance sting

A category of insurance risk that hardly existed a little over a decade ago has morphed into a meaningful source of losses for the industry.

 

Claims tied to SRCC — strikes, riots and civil commotion — are emerging as a growing headache for insurers as episodes of unrest increasingly lead to the destruction of property in Western democracies. Howden Re estimates that insured losses related to SRCC soared from negligible levels in 2013 to more than $8 billion between 2020 and 2024. 

 

SRCC losses are prone to huge swings between years, with single events often changing the landscape significantly. After relatively few claims globally in 2025, Howden Re told Bloomberg it’s now expecting the US to see a clear increase in SRCC losses this year.

 

 

“We live in a time of heightened risk,” said David Flandro, head of industry analysis and strategic advisory at Howden Re. And the flare-ups making news headlines in the US are “clearly indicative of a broader trend,” he said.

 

Civil unrest is on the rise globally, a development that has coincided with a measurable increase in levels of inequality and polarization in some of the world’s richest countries. In most Western nations, for example, the majority of citizens no longer expect to see any growth in generational wealth, according to the Pew Research Center. 

 

Rising political division is adding to SRCC risks in both Europe and the US, according to Verisk Maplecroft. However, the sharpest increase in protest sizes is taking place in the US, Verisk said in December.

 

When it comes to ranking countries with the greatest SRCC risk, the US is the No. 1 Western democracy and sits at No. 5 overall, putting it ahead of Pakistan, Bangladesh and India, according to first-quarter data provided by Verisk Maplecroft. France ranks seventh. SRCC models take into account not just the risk of unrest, but also the cost of replacing property that’s damaged.

 

“It’s fair to say that the SRCC risk landscape has fundamentally changed,” said Torbjorn Soltvedt, associate director of political violence at Verisk.

 

SRCC coverage is generally bolted on to other insurance policies, though there’s evidence that the rise in such risks is prompting companies to start seeking specific cover. At the same time, Howden Re said already back in 2023 that insurers were starting to charge “significant additional premiums” for SRCC coverage, with retail assets among the most affected.

 

Over two-thirds of multinational corporations already use political risk modeling tools, a trend Howden Re says is rising. And in 2024, Lloyd’s of London — the 338-year-old insurance market — assigned SRCC risk its own code. In 2025, Verisk released its first SRCC catastrophe model, focused on the US market. 

 

A Changing US

 

In the US, several data-tracking services show that the number of political protests is on the rise. Meanwhile, perceptions of the US are changing, says Stephen M. Davis, senior fellow at Harvard Law School’s program on corporate governance and co-founder of the United Nations’ Principles for Responsible Investment. 

 

Viewing the US as a “safe haven is a thing of the past,” he said. That’s because there’s a “policy volatility that now exists,” which can be seen “internally as well as externally.” 

 

It’s a sentiment that’s been playing out in markets, as some institutional investors in Europe look for ways to reduce their exposure to the US. 

 

For insurers, calculating reliable loss risks is proving hard to model and Soltvedt notes that protests don’t always lead to property damage. For example in Minnesota, where Immigration and Customs Enforcement officers killed two US citizens, protesters have conducted themselves in a way that’s resulted in “limited direct impacts on commercial property or private property so far,” he said.

 

The Trump administration is now retreating from its immigration-enforcement blitz in Minnesota, pulling back after more than two months of operations.

 

But given the overall pace of growth in SRCC, the probability that a single event might result in more than $5 billion of losses can no longer be ignored, according to Verisk Maplecroft. In some areas, SRCC loss risks may even exceed those brought on by natural catastrophes, it said.

 

SRCC as a standalone insurance product “used to be a very niche, small class of business,” said Srdjan Todorovic, head of political violence and hostile environment solutions at Allianz Commercial. But a number of big events in recent years “hit the industry pretty badly and sobered up the market.”