Civil unrest 2021: Learning from last year’s record losses

By Rachel DeLuco, Kevin Burke, Arun Pillai-Essex

December 29, 2021 / 4 min read

Following a tumultuous 2020, the United States continues to be at high risk for civil unrest, according to the Verisk Maplecroft Civil Unrest Index.

Verisk Maplecrofts Civil Unrest Index

Verisk Maplecroft sees protest rates as likely to remain broadly stable between the fourth quarter of 2021 and the first quarter of 2022, but unlikely to fall back to pre-2020 levels, keeping the U.S. firmly in the “high risk” category.

According to analysis by Verisk Maplecroft, the drivers of unrest are manifold:

Acute political polarization and ongoing distrust in the legitimacy of the electoral process: The year 2021 began with an unprecedented attack on the United States Capitol and polls suggest that a segment of the public believes the 2020 election was illegitimate—potentially powerful kindling for future clashes.¹
Divisions over criminal justice and police reform: The focal point of multiple protests in 2020 remains a highly contentious issue as 2021 closes.²
Broader socio-economic inequities: U.S. income inequality remained high in 2021³ and research suggests that when a society already beset with high income inequality emerges from a pandemic, it’s ripe for further disruption.⁴

There are other flashpoints with the potential to trigger bouts of civil unrest, including mask and vaccine mandates and their extension from the public to the private sector. These mandates have been the rallying cry for angry protests and even violent confrontations.⁵

These are among the factors accounting for the United States’ 71^st rank in Verisk Maplecroft’s Civil Unrest Index for the fourth quarter of 2021. The Index assesses the risk of disruption to business in 198 countries caused by the mobilization of societal groups in response to economic, political, or social factors. It captures a broad spectrum of incidents of unrest, from peaceful protests, to violent mass demonstrations and rioting.

What could that mean for insurers?

Learning from the past

Last year, the U.S. ranked 34^th in the Civil Unrest Index and a recent analysis of businessowners and commercial property loss data contributed to the ISO Statistical Database reveals losses under both policies were orders of magnitude larger than prior years.⁶ Insurers reporting businessowners statistical data to Verisk saw steeper total dollar losses in 2020 than their commercial property counterparts. Businessowners riot and civil commotion losses grew 23,151 percent from 2019, while commercial property losses jumped 21,458 percent.

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Civil Unrest Comm Prop Losses

Historic losses occurred in a matter of weeks

Insurer losses under both coverages were heavily concentrated in a several week span beginning at the end of May, the month of George Floyd’s murder. Roughly $133 million of the $153 million in businessowners losses occurred that month, while $73 million of the approximately $87 million in commercial property riot and civil losses were experienced in May.

High loss levels spilled over into June 2020, making it the second highest month of losses, although they tailed off sharply from May. Businessowners insurers reported roughly $16 million in riot and civil commotion losses for that month, while commercial property insurers reported approximately $8 million.

States with the highest increase in losses

The meteoric growth in riot and civil commotion losses was a nationwide phenomenon, but the impact varied across the country and across lines of business.

When examining the data by percentage increase (not absolute cost), we see that some states that may not necessarily have been considered the epicenter of protest activity—such as Kentucky—nevertheless experienced enormous increases—a reflection both of how low their starting average was, and how widespread these losses were in 2020.

Civil Unrest Top 5 Statewide

We selected percentage increase in losses, not absolute losses, so as not to skew the data towards large states or those with many commercial property exposures.

The loss costs impact

Following such a sharp spike in losses, insurers may be wondering about the impact on ISO advisory prospective loss costs. ISO Loss Costs take several years of experience data into consideration. This is to account for multiple variables, including volatility and the presence of outlier years. As stark as 2020’s riot and civil commotion losses appear, it’s worth noting that they represent a small fraction of the losses in both businessowners and commercial property reported over the experience period used in related Verisk reviews. Other perils, such as wind, continue to account for a considerably larger share of losses.

Measuring the impact

So how can insurers prepare for potential damage caused by civil unrest?

In addition to the Civil Unrest Index, the Maplecroft team is developing a model that can predict insurance losses from property damage and business interruption from civil unrest. To learn more, please contact Sam Haynes at Sam.Haynes@maplecroft.com.

Participating insurers can also access the most up-to-date ISO Loss Costs by using the new Consolidated Loss Cost Download tool.

Harry Enten, “Polls show majority of Republicans mistakenly think the 2020 election wasn't legitimate,” CNN, April 11, 2021, < https://www.cnn.com/2021/04/11/politics/voting-restrictions-analysis/index.html >, accessed on December 13, 2021.
Jacob Pramuk, “Police reform talks fall apart after months of bipartisan negotiations in Congress,” CNBC, September 22, 2021, < https://www.cnbc.com/2021/09/22/police-reform-booker-bass-scott-negotiations-fall-apart.html >, accessed on December 13, 2021.
Income and Poverty in the United States: 2020 United States Census Bureau, September 14, 2021, < https://www.census.gov/library/publications/2021/demo/p60-273.html >, accessed on December 13, 2021.
Tahsin Saadi Sedik, et. al., “When Inequality is High, Pandemics Can Fuel Social Unrest,” IMFBlog, December 11, 2020, < https://blogs.imf.org/2020/12/11/when-inequality-is-high-pandemics-can-fuel-social-unrest/ >, accessed on December 13, 2021.
Jennifer Sinco Kelleher, et. al., “Mask, vaccine conflicts descend into violence and harassment,” ABC News, August 22, 2021, < https://abcnews.go.com/US/wireStory/mask-vaccine-conflicts-descend-violence-harassment-79578203 >, accessed on December 13, 2021.
Verisk collects data for these losses through the ISO Statistical Plan. Data collected under the ISO Businessowners and ISO Commercial Property programs included loss reported for riot and civil commotion and theft and vandalism. After closely analyzing the data, we determined that 2020 losses reported under theft and vandalism were distinct from the losses reported under riot and civil commotion and so we excluded theft and vandalism losses from this analysis. In 2020, Verisk PCS^® reported cumulative insured civil unrest losses at over $2 billion, which includes both losses reported to Verisk and loss estimates generated by PCS.