Terrorism risk


THE APPETITE


INCREASES Following the temporary lapse of the Terrorism Risk Insurance Act (TRIA), Intelligent Insurer explores the market’s appetite to welcome terrorism risk back into the private sector, and asks what other risks currently held by governments could potentially be transferred.


for this type of coverage to continue and also the willingness of the private  


D While insurers already provide some capacity for terrorism risk, the lapse


saw a number of insurers announce additional capacity, demonstrating the 


However, while re/insurer appetite is clearly there, issues such as pricing, an inability to calculate the frequency of such events and a level of coverage 


“There has always been a modestly sized standalone market for terrorism


coverage, and in 2014 it was recognised that there was a possibility that TRIA wouldn’t be reauthorised, so there was limited contingent capacity available on the market to cover the eventuality that TRIA would lapse or be delayed,” says Robert Hartwig, senior vice president and chief 


“When the lapse became imminent, a number of insurers announced some additional capital, but they were in general anticipating that this would be an  


Jennifer Rubin, vice president, underwriting manager for terrorism, war and political violence at Hiscox, says that while appetite is there, there was 


“The interest in taking on terrorism risk really depends on the line


           coverage for up to three months, as Hiscox did, but some carriers were very  


18 | INTELLIGENT INSURER | Spring 2015


espite its reinstatement until 2020, the temporary lapse of the Terrorism Risk Insurance Act (TRIA), which provides the US with government-funded coverage against terror attacks, highlighted, perhaps paradoxically, both the need


Given the suspected eventual renewal of TRIA, it is hard to gain a true


    


         


“Reinsurers didn’t come forward with new exclusions and while insurers themselves were wondering what was going to happen in the new congress, 


CHALLENGES AFOOT


The new bill, which means that TRIA has been extended until the end of   


SHUTTERSTOCK / AHTURNER


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