For insurance brokers and financial advisers, one of the most important commitments made to clients is certainty. Clients expect that when a disruptive event occurs, their insurance policy will respond as intended. They rely on their broker to explain what is covered, what is excluded and how the claims process will unfold.
Yet the nature of modern risk is making that certainty increasingly difficult to achieve. At a recent global forum on terrorism and catastrophe risk, one issue dominated discussions among insurers, reinsurers and risk specialists: attribution. Put simply, attribution refers to determining who is responsible for an event and, in many instances, that determination influences whether a loss falls within policy cover or is excluded.
While this may appear to be a technical insurance issue, it has practical implications for brokers, financial services providers and their clients. As emerging risks become more complex, the industry’s reliance on attribution as a trigger for coverage is creating new challenges for contract certainty and claims management.
Why attribution matters
Historically, insurance has drawn relatively clear distinctions between different types of events.
Terrorism has generally been associated with non-state actors, while war has traditionally involved actions by sovereign states and is commonly excluded from standard insurance policies. This distinction worked reasonably well when responsibility for an event could be identified with confidence.
Today, however, that assumption is becoming increasingly difficult to sustain. Modern threats are often deliberately designed to obscure responsibility. Cyberattacks may originate through multiple jurisdictions, proxy groups can mask the involvement of larger actors, and organised campaigns frequently involve layered intentions that are difficult to prove in the immediate aftermath of an incident.
For brokers, this creates an important consideration. When policy outcomes depend on determining who was responsible for an event, certainty around coverage can be delayed until that attribution process has been completed. In some cases, that process may take weeks or even months.
The result is uncertainty at precisely the moment when clients are seeking reassurance and clarity.
Lessons for the South African market
Although these discussions often focus on international terrorism or geopolitical conflict, the underlying challenge is not unique to global events. South Africa has its own examples where the classification of an event is not immediately straightforward.
Questions frequently arise around where opportunistic criminal activity ends and broader public disorder begins, or when isolated acts of violence evolve into riots or civil commotion. These distinctions are important because they influence how claims are managed and which insurers ultimately respond.
The experience following the July 2021 unrest demonstrated how complex these classifications can become. While mechanisms exist to assess qualifying events, the practical reality is that understanding the circumstances surrounding widespread incidents often requires careful evaluation before claims can be finalised.
For brokers, this reinforces the importance of helping clients understand that certain claims may involve broader assessments before liability can be confirmed. Effective communication during these periods is often as valuable as technical policy knowledge.
A different approach to creating certainty
One of the most interesting perspectives shared at the international forum was how several countries have sought to reduce uncertainty through formal event declarations.
Jurisdictions such as Australia and France have established processes where the State, typically through the Treasury or another designated authority, formally determines whether an incident constitutes terrorism.
Rather than relying solely on insurers, policy wording or lengthy attribution debates, these declarations provide a consistent basis for determining how an event should be treated across the insurance market.
This approach shifts the conversation away from proving responsibility and towards providing certainty for policyholders and insurers alike. While every insurance market operates within its own legislative and regulatory framework, the principle is worth considering. In an increasingly complex risk environment, consistency and clarity may offer greater value than pursuing absolute precision in every circumstance.
What this means for brokers and FSPs
For intermediaries, these developments reinforce several important responsibilities.
Firstly, policy wording matters more than ever. Brokers should ensure that clients understand how specialised covers, including Sasria protection, operate alongside conventional insurance policies and where different triggers apply.
Secondly, client expectations need to be managed before losses occur. Explaining how complex events may be assessed helps avoid confusion when significant incidents arise and claims require broader evaluation.
Finally, brokers continue to play a critical role in building trust. During periods of uncertainty, clients look to their advisers not only for technical interpretation but also for informed guidance and confidence throughout the claims process.
As risks continue to evolve, conversations about emerging threats, systemic events and policy certainty should become part of routine risk advisory engagements rather than discussions reserved only for major catastrophes.
Looking ahead
Insurance has always been built on the promise of certainty. However, that certainty cannot depend entirely on questions that may take considerable time to answer. As threats become more interconnected and increasingly difficult to classify, the industry has an opportunity to reconsider how certainty is created for policyholders.
For Sasria and the broader insurance market, this presents an opportunity to continue strengthening collaboration across insurers, brokers, regulators and the State to ensure that claims decisions remain consistent, transparent and responsive when clients need them most.
Ultimately, clients do not judge insurance by technical definitions or legal distinctions. They judge it by outcomes. For brokers and advisers, maintaining confidence in those outcomes will remain central to delivering trusted advice in an increasingly uncertain world.