Looming Terrorism Threats as TRIPRA Expires in 2020
The global property terrorism insurance market remains strong with sufficient capacity to respond to today’s predominant terrorist threats, according to the 2019 Terrorism Risk Insurance Report. Continued stability of the US property terrorism insurance market, however, is a point of focus as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) is set to expire in 2020.
According to the report, the predominant terrorism threat globally remains from extremists focused on inflicting mass casualties in unsophisticated attacks on crowded public spaces rather than large-scale property damage. The report notes that should Congress allow TRIPRA to expire without a replacement, it could create capacity shortfalls, especially for businesses located in high profile cities and employers with significant workers’ compensation accumulations.
Other key findings from this year’s report include:
- From May 2018 through May 2019, terrorism risk ratings fell across 116 countries, most notably in Egypt, Turkey, and Spain. Little improvement, however, occurred in the world’s riskiest states for terrorism, including Afghanistan, Yemen, and Iraq.
- The number of Marsh-managed captives actively underwriting one or more insurance programs that access TRIPRA increased 10 percent to 182 captives in 2018.
- The number of US companies purchasing terrorism coverage embedded in property policies under TRIPRA remained consistent at 62 percent in 2018.
- Education entities, media, financial institutions, and real estate companies had the highest terrorism insurance take-up rates by industry in 2018.