SRCC Reinsurance Capacity: Securing Riot and Strike Cover

SRCC Reinsurance: Securing Strikes, Riots and Civil Commotion Capacity After Market Withdrawal

Last reviewed: November 2026

SRCC reinsurance capacity is the reinsurance available to protect a cedent against property and business interruption losses from strikes, riots and civil commotion. For many years it came bundled inside property catastrophe treaties, but after a run of large civil unrest losses much of that capacity moved out of cat programmes and into specialist markets.

Cedents in exposed countries now have to buy SRCC deliberately, with its own limits, retentions and wording. Reinsurers have to decide whether to write it at all, and on what terms.

This guide is for CUOs, heads of outwards reinsurance, treaty underwriters and CROs. It explains why capacity withdrew, where it sits now, how to structure and price it, and what to check before the next renewal.

Key Takeaways

• SRCC covers strikes, riots and civil commotion, and it behaves like a man-made catastrophe that is hard to model and tends to recur.
• After unrest in Chile (2019) and South Africa (2021), many reinsurers excluded SRCC from cat treaties or capped it with sublimits and aggregates.
• Most SRCC capacity now sits in standalone SRCC or political violence treaties, usually excess of loss with an annual aggregate limit.
• The hours clause for riot can split a multi-day event into several occurrences, changing both retentions and recoveries.
• In some markets, such as South Africa and Namibia, state-backed special risks insurers carry these perils instead of the private market.
• A clear peril ladder in the wordings, from strike to war, prevents gaps between SRCC, terrorism and political violence covers.

What Is SRCC Reinsurance?

SRCC reinsurance is reinsurance that responds to losses caused by strikes, riots and civil commotion. It protects the cedent's property damage and, where covered, business interruption losses from these perils.

SRCC sits at the lower end of the political violence spectrum. Above it sit malicious damage, terrorism, insurrection, rebellion, revolution and war, each with its own wording and market.

How Does SRCC Differ From Natural Catastrophe Risk?

SRCC differs from natural catastrophe risk because its drivers are social and political, not physical. There is no hazard map that says where the next riot will start.

Three features make it hard for reinsurers:

1. Poor modelability. Vendor cat models cover few civil unrest scenarios, so pricing leans on scenarios and judgement rather than event catalogues.
2. Concentration in urban retail and logistics. Looting targets shopping centres, warehouses and distribution hubs, where values cluster tightly.
3. Clustering in time. Unrest often recurs in waves over weeks, so many separate occurrences can hit one treaty year.

Why Did SRCC Capacity Withdraw From Cat Treaties?

SRCC capacity withdrew from catastrophe treaties because a series of unrest events produced losses that the market had not priced. Before then, many property cat programmes covered SRCC implicitly because they did not exclude it.

Several episodes changed that view. Chile's social unrest in late 2019 and the July 2021 unrest in South Africa both generated large property and business interruption claims from looting and arson.

What Happened in South Africa in 2021?

The July 2021 unrest in KwaZulu-Natal and Gauteng produced an event that Sasria, the state special risks insurer, had not faced in its history. The South African government reported claims of about R32 billion and said the event left Sasria technically insolvent.

The government then allocated R22 billion to recapitalise Sasria, according to the official South African Government News Agency. Sasria also said it would review its own reinsurance arrangements as part of its recovery.

How Did Reinsurers Respond?

Reinsurers responded by narrowing what property cat treaties cover. The common responses were:

• A full SRCC exclusion in the cat treaty, with the peril moved to a standalone cover
• A sublimit for SRCC inside the cat treaty, often with its own annual aggregate
• A territorial exclusion for countries or regions seen as high risk
• A tighter definition of riot and civil commotion, with clearer boundaries to insurrection and terrorism

The effect was a shift from implicit to explicit SRCC capacity. Cedents that used to rely on the cat treaty now face a priced, limited and separately negotiated cover.

Where Does SRCC Capacity Sit Now?

SRCC capacity now sits in four main places. The right mix depends on the country, the cedent's book and whether a state scheme exists.

The table is a starting point. Treaty wording, local regulation and the cedent's own policy forms decide which option actually works.

How Do State Special Risks Schemes Change the Picture?

In some countries, a state-backed insurer carries these perils by law or by market design. Private insurers and reinsurers then have little or no local SRCC exposure.

Sasria describes itself as the only non-life insurer that provides special risk cover in South Africa, and its cover attaches to the underlying policy. In Namibia, NASRIA states that it is the only insurer providing cover for damage from riots, civil commotion, strikes and similar perils.

For reinsurers, these schemes matter in two ways. They remove SRCC from local primary portfolios, and they become buyers of reinsurance in their own right.

For the wider context on how state and pooled solutions close uninsured gaps, see our piece on the protection gap and reinsurance capacity.

How Should an SRCC Treaty Be Structured?

An SRCC treaty is usually structured as an excess of loss layer with an occurrence limit, an hours clause and an annual aggregate limit. Each of these terms matters more for SRCC than for most natural perils.

What Hours Clause Applies to Riot?

The hours clause defines how long one loss occurrence can last. For riot, strike and civil commotion, 72 consecutive hours is common market practice, but wordings vary.

Multi-day unrest can therefore become several occurrences. Each carries its own retention, and each can use the occurrence limit again until the aggregate runs out.

Two drafting points deserve attention:

1. Geographic scope. Some wordings also require losses to arise within a defined area, such as one city or a radius, before they can be combined.
2. Choice of start time. The cedent usually chooses when each hours period begins. That choice can move a large amount of loss between occurrences.

Why Do SRCC Treaties Need Annual Aggregates?

SRCC treaties need annual aggregate limits because unrest tends to come in waves. Without one, a single turbulent year could hit the layer many times.

The aggregate is often expressed as a multiple of the occurrence limit, such as twice the limit. Reinstatement terms then decide what the cedent pays to restore cover after each loss.

How Should the Peril Ladder Be Drafted?

The peril ladder is the set of definitions that separates strike, riot, civil commotion, malicious damage, terrorism, insurrection and war. Each step can sit in a different treaty with a different panel.

If two wordings define the same peril differently, one event can fall between them. That is where most SRCC disputes start.

Our article on terrorism reinsurance and the shift from property to people covers the terrorism end of that ladder.

Worked Example: How the Hours Clause Shapes an SRCC Recovery

The illustration below is simplified and uses USD millions. It shows how the hours clause and the aggregate interact on a standalone SRCC treaty.

Programme:

• Property cat XoL: excludes SRCC at the latest renewal
• Standalone SRCC XoL: 30 xs 10, each and every loss occurrence, 72-hour clause
• Annual aggregate limit: 60 (one reinstatement at 100%, pro rata as to amount)
• SRCC layer premium: 3.0

Event: six days of unrest and looting hit retail and warehouse risks in one metropolitan area. The gross SRCC loss is 85, split by the cedent into two 72-hour periods of 55 and 30.

Occurrence 1 uses the full layer, and that limit is reinstated for 3.0. Occurrence 2 then draws 20 from the reinstated limit, leaving 10 of the aggregate and no further reinstatement.

Now compare two alternatives for the same event.

With a single occurrence, the cedent recovers only one full limit. With no SRCC cover, the full 85 stays net.

The lesson for cedents: the hours clause and the aggregate decide the recovery as much as the limit does. Test the structure against a multi-day scenario, not just a single-day loss.

The lesson for reinsurers: a short hours clause on a recurring peril works like extra limit. Price the layer on the aggregate you could actually pay, not on the occurrence limit.

When Should You Use a Sublimit, Standalone Treaty or Political Violence Cover?

The right choice depends on how exposed the book is, what the cat panel will accept and how broad the cedent's original policies are. The table maps common situations to a typical answer.

Which SRCC Mistakes Surface Only After an Event?

Six mistakes cause most SRCC surprises. Each is cheap to fix at renewal and expensive to discover after unrest.

How Should Cedents and Reinsurers Prepare for an SRCC Renewal?

Preparation comes down to better exposure data and sharper questions. The data request and questions below are a practical starting point.

What Data Should Reinsurers Request?

Which Questions Should Be Asked at Renewal?

• Which original policies still grant SRCC, and at what sublimits?
• How would the last major unrest event split under the proposed hours clause?
• Does the per risk treaty exclude SRCC, or does it carry an event limit that caps it?
• How is malicious damage treated, and does it overlap with riot?
• Which panel responds if an event escalates from riot to insurrection?

For a broader view of how geopolitical risk is reshaping specialty capacity, see political risk reinsurance in a de-globalising world.

How Does SRCC Affect Capital and Reporting?

SRCC affects capital through the man-made catastrophe scenarios used in internal models and rating agency assessments. Without vendor models, firms usually rely on realistic disaster scenarios built from their own exposure data.

Under IFRS 17, a standalone SRCC treaty is a separate reinsurance contract held and is measured on its own terms. Many annual SRCC layers qualify for the premium allocation approach, but reinstatement premiums and aggregate erosion still need careful tracking.

Where a cat treaty now excludes SRCC, the net catastrophe scenario for unrest rises. Boards should see that change explicitly, not discover it in the next capital run.

What Does the SRCC Market Look Like for 2027 Renewals?

Since the post-2021 reset, SRCC has largely settled into an explicit, separately priced cover. Specialist political violence capacity is available, but it is underwritten on exposure detail, wording quality and aggregate control.

Cedents are pushing for SRCC to return inside cat treaties as broader property capacity softens. Reinsurers are generally more willing to offer sublimits than to drop exclusions entirely.

The bigger risk is drift in terms rather than rate. Longer hours clauses, wider geographic scope and weaker aggregates can quietly rebuild the exposure the market spent several years removing.

Checklist for Heads of Outwards Reinsurance

Use this checklist before you place or renew SRCC protection.

• Original policy SRCC wordings match what the reinsurance programme covers
• The cat treaty SRCC position (excluded, sublimited or covered) is documented and understood
• The per risk treaty either excludes SRCC or caps it with an event limit
• The hours clause and geographic scope have been tested against a multi-day event
• Annual aggregates and reinstatement terms are modelled for cash flow and net loss
• Peril definitions are consistent across SRCC, terrorism and political violence covers
• BI exposure is included in SRCC accumulation and limit setting
• Occurrence and aggregate erosion is tracked in a controlled system, not spreadsheets

For the last point, a centralised reinsurance treaty management platform holds sublimits, hours clauses and aggregates alongside the rest of the programme.

Key Terms

SRCC: Strikes, riots and civil commotion. A group of man-made perils at the lower end of the political violence spectrum.

Political violence cover: Insurance or reinsurance covering a range of perils from strike and riot up to terrorism, insurrection, rebellion and sometimes war.

Hours clause: The wording that sets how long one loss occurrence can last, commonly 72 hours for riot.

Annual aggregate limit: The maximum a treaty pays for all occurrences in one treaty year, regardless of how many occur.

Sublimit: A lower limit for a specific peril inside a broader treaty, such as an SRCC sublimit in a cat programme.

Peril ladder: The set of definitions that separates strike, riot, civil commotion, terrorism, insurrection and war across different covers.

State special risks insurer: A state-backed entity, such as Sasria in South Africa, that writes political and civil unrest perils directly.

Reinstatement premium: The additional premium paid to restore a layer's limit after a loss, often pro rata as to amount.

Sources

• Sasria SOC Ltd, South Africa
• South African Government News Agency: Government allocates R22 billion to Sasria
• NASRIA, Namibia Special Risks Insurance Association