Terrorism risk
“A number of insurers announced some additional capital, but they were in general anticipating that this would be an interim source of capital.” Robert Hartwig, III
Placing this risk fully within the private sector has several other limitations
“There would be private capital from re/insurers which would be
drawn into the market in the absence of TRIA, but the problem is that in aggregate, it would not come anywhere close to the capacity that existed
Association (IUA), says that despite much progress in the insurance industry towards a better understanding of terrorism risks and more private sector event of a large scale terrorist event, insurers would be forced to consider withdrawing cover in some areas and policies would potentially be much
“The renewal of TRIA provides the insurance industry with the economic security it needs to continue supporting the wider economy across a range
Rating agency Standard & Poor’s (S&P) also welcomed the reauthorisation
“In particular, the increase in co-insurance could raise the exposure of
coverage for terrorism is the inability to accurately predict the frequency subject of substantial studies and is considered as an act of God, there is no
20 | INTELLIGENT INSURER | Spring 2015
“If you don’t understand the frequency, then you don’t understand a very data available, you still wouldn’t be able to insure it as it’s an act of man,”
“This doesn’t mean that people won’t write insurance coverage for it, it
No re/insurer will risk a material portion of their earnings or capital on
While Rubin agrees with some of these points, she believes that the
“In many respects the cover provided by the standalone market is superior to that under TRIA, particularly as it is not dependant on co-insurance or
“In terms of capacity, it depends on location of the insured and the price
OPENING DOORS markets continue to contend with softening rates, re/insurers are actively
With insurance pools costing governments billions of dollars a year, an
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