July 10th, 2018

Trends in Terror Cover

Posted at 1:00 AM ET

Hospitality and gaming companies, on average, allocated the largest share of their property insurance programs to terrorism coverage in 2017.

Data in Marsh’s 2018 Terrorism Risk Insurance Report, produced with support from Guy Carpenter, showed that hospitality and gaming companies allocated 10 percent of property premium to terrorism coverage.

This trend is generally due to the large footprint of these industries in cities, which are perceived as targets for acts of terrorism.

Power and utilities companies followed hospitality and gaming, allocating 7 percent of property premiums to terrorism. Entities in education, financial and manufacturing sectors each allocated 6 percent of premiums to terrorism coverage, on average.

Comparing by region, companies based in the Northeastern United States allocated the largest percentage of their overall property insurance premiums to terrorism coverage. They also continued to purchase terrorism property insurance at the highest rate and paid the highest price for it, at a median of USD 30 per million – largely due to the region being home to many large metropolitan areas. By contrast, rates were lowest in the Midwest, at a median price of USD 18 per million.

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