These days, as acts of terrorism continue to grab the headlines, the tendency for insurance buyers would be to purchase a terrorism policy, and think that they have addressed their risk profile, when the wider, political violence coverage might have been more appropriate. Case in point is the recent occupation of the Bangkok Airport, where those who may have suffered business interruption losses or material damage would have been disappointed to learn that their terrorism policies would not have covered these incidents. Similarly, the recent outbreaks of unrest in China would not have been covered.

The good thing about political violence coverage is that in addition to terrorism, it also covers strikes, riots, civil commotions, civil wars, wars, rebellions, revolutions, coup d’etats, insurrections, malicious damages and mutinies, amongst others.

Why then would anyone purchase terrorism coverage? Well, besides political violence coverage being more expensive due to its wider coverage, many countries that may be high-profile targets of terrorism may not be prone to other types of political violence. Singapore, as an example, has not had a strike, riot, civil war, revolution or any of the sort for at least half a century, and yet as a major US ally in the region, is a potential target. Accurate identification and assessment of risks are therefore critical, as Terrorism and Political Violence continue unabated throughout Asia and across the globe, and in fact look set to increase in the near future.

India's 911

In the last quarter of 2008, terrorism and political violence in the region were thrust into the limelight thanks to events in Mumbai and Thailand. The upward trend in political violence looks likely to continue in 2009 for a combination of reasons.

The Mumbai attacks brought home the spectre of terrorists hitting much closer to home. Governments now have to act on the assumption that no region or locale can be completely free from the threat of terrorism. As intelligence agencies continue to battle the terrorists, the tactics used by extremists continue to evolve and therefore it is unknown what form the next major attack will take and where it will occur.

The current global economic crisis will give rise to increasing unrest as economic hardships filter down through the system. 2008 has already witnessed a series of outbreaks of unrest across the globe, as food and fuel prices soared to unprecedented levels and governments had to contend with growing inflationary pressures. In 2008, there were 48 separate food and fuel riots as a result of people’s anger at unaffordably high prices. These pressures have now passed and have been replaced by a number of other concerns.

China's Employment Woes

In China, a factory being closed is a prelude to a riot, it seems, as was evidenced in 2008. This pattern looks set to continue in China as the economy slows and unemployment rises. Beijing is alarmed by outbursts of civil unrest, both in the country's hinterland as 9 million migrant workers return after losing their jobs, and in the export hub of Guangdong where violence has been simmering for months. Some 3,600 toy factories have already closed this year.

Premier Wen Jiabao said recently that the key priority is to find jobs for migrants and some 6 million fresh graduates -- the two groups most feared as political tinderboxes. "If you are worried, I am more worried than you," he told students.

This situation is similar to many other parts of the region with growing economic issues, rising unemployment and increasing volatility. The region is expected to experience an increasing extent of civil disturbances, thanks to the economic slump.

Rising unemployment will also fuel extremism and fundamentalism as the number of unemployed young men and women grows globally and in the region.

On top of economic factors there are also rising political tensions in Thailand, Philippines, Malaysia, Indonesia, India and Bangladesh.

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