While the global property terrorism insurance market remains strong and well capitalised, the potential expiration of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) could create capacity shortfalls, especially for businesses located in high profile cities and employers with significant workers’ compensation accumulations.
In a new report, global re/insurance brokerage Marsh underscores the importance of Congress renewing TRIPRA, which is set to expire in 2020.
The Act provides a federal backstop to insurers to help increase the availability and affordability of cover for commercial businesses in need of terrorism insurance.
It has been renewed periodically since its introduction in 2002 following the 9/11 attacks, but with the intensely partisan atmosphere in the U.S government, there are concerns that the legislation could be left to expire in 2020.
Published today, Marsh’s 2019 Terrorism Risk Insurance Report explores the state of terrorism and the terrorism insurance marketplace in key regions around the world.
This year’s report also includes insurance market insights from Marsh’s World Risk Review ratings platform, which provides risk ratings across nine different perils for 197 countries.
According to the report, the primary terrorism threat globally remains extremists focused on inflicting mass casualties in unsophisticated attacks on crowded public spaces, rather than large-scale property damage.
Over the last few years, the global property terrorism insurance market has responded by expanding coverage – most notably in the development of coverage for active assailant events and non-damage business interruption.
While the overall terrorism market is stable and able to respond to today’s threats, Marsh says the long-term viability of the US property terrorism insurance market is back in the spotlight.
“The existence of government backstops, like TRIPRA, has played an important role in ensuring the continued stability and health of the global property terrorism insurance market,” said Tarique Nageer, Terrorism Placement Advisory Leader, Marsh.
“TRIPRA is in place until December 31, 2020, and all eyes are on the Congressional schedule as we approach this deadline.
“In the meantime, US businesses and organizations are advised to work with their brokers as soon as possible to map out a strategy to mitigate potential disruption.”