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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.
Despite 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 for this type of coverage to continue and also the willingness of the private sector to potentially assume some types of risk currently off limits.
While insurers already provide some capacity for terrorism risk, the lapse saw a number of insurers announce additional capacity, demonstrating the interest in the market.
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 that cannot compete with TRIA still pose significant challenges for insurers.
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Terrorism Risk Insurance Act, TRIA, Intelligent Insurer, terrorism risk, Aon Benfield Americas, Hiscox, Bob Hartwig