SRCC Risk during the LA Protests
Simulated High-Impact Demonstration Route, Los Angeles
The recent civil unrest followed by widespread scheduled protests in Los Angeles earlier this month underscores the need to take SRCC risk seriously from a risk-holder and insurer perspective. Fortunately, demonstrations throughout the Los Angeles area remained largely peaceful, but focused activity within dense urban locations such as downtown Los Angeles, as well as over a dozen local protests across the metropolitan area, mean that there was significant property exposure if tensions escalated into a full-fledged SRCC event.
Estimated First Floor Exposure near LA Demonstration Locations ($B USD)
We estimate a total first-floor exposure value of approximately $1.6 Billion within 500m of the Metropolitan Detention Center in Downtown LA, the focus of continued protesting of immigration raids. However, when the entire locus of regional events within the greater LA area from the weekend is considered, this number increases to nearly $20 Billion of exposure within the direct proximity of demonstrations with escalating exposure in the event of subsequent demonstrations located within additional high-risk areas.
Calculated SRCC Risk Intensity nearby DTLA demonstration locations
Across the city, protests, often characterized as marches in news coverage, began at specific SRCC target points and moved along main thoroughfares in the city, underscoring the need for models that take these patterns into effect. Simple spatial correlation is not precise enough to predict potential PML damage.
“L.A. Protests: “nearly $20 Billion of exposure within the direct proximity of demonstrations””
Within the downtown region, where the most intense activity was focused, our srccQuantum model demonstrates potential insured losses greater than $150 Million were possible from a single localized event had peaceful demonstration devolved into rioting and property damage.
Because all-risk property policies often don’t exclude SRCC as they do other types of political violence, insurers are exposed to this risk through silent coverage. Given the potential for high exposures and aggregation from events where SRCC risk factors are present, such as those in Los Angeles, this can pose a significant risk to the industry at large.
Immigration is a hot button issue around the world, but it is one of several. L.A. serves as a near-miss and a cautionary tale. The global macro trend of rising SRCC losses isn’t going anywhere and the industry needs the tools to more precisely model the risk and understand exposure.
