TRIA, U.S. Terrorism and International Terrorism: Effect on the Insurance and Reinsurance Markets
Emil Metropoulos, Senior Vice President
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We excerpt here from the recently published Marsh report: Terrorism Risk Insurance 2010, the section authored by Guy Carpenter’s Emil Metropoulos.
Commercial insurers are strongly supportive of the Terrorism Risk Insurance Act of 2002 (TRIA), as it provides them an ultimate safety net for their terrorism exposures. However, the residual risk for terror events retained by insurers below the triggers and retention levels set by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA), coupled with the relatively high cost of reinsurance in key exposure zones, means that insurers remain cautious about terrorism exposure. As a result, they continue to avoid accumulating high-profile urban exposures.
