The re/insurance markets could again take on elements of terrorism risk, according to Kean Driscoll, CEO of Validus Reinsurance. He said he disagrees with assertions previously made by the industry that terrorism cannot be priced.
His comments come at a time when then future of the Terrorism Risk Insurance Act (TRIA) is being fiercely debated. Driscoll was speaking at Standard & Poor's Ratings Services' 2013 Bermuda (Re)insurance conference, held in Hamilton, Bermuda, last week.
“The industry hasn't served itself well before Congress, saying that traditional terrorism cannot be priced. We disagree with that. As an industry, we committed substantial resources on how to price the frequency of traditional terrorism. We're of the view that the market could bear more traditional terrorism risk," Driscoll told delegates.
He continued by saying that the Terrorism Risk Insurance Act (TRIA) should be limited to nuclear, biological, and cyber terrorism, where the "quantum of losses is unknowable, so it's uninsurable."
There has been a suggestion by some in the industry that the recent influx of alternative capacity could be harnessed to help provide capacity in the terrorism market should TRIA not be renewed in its current form.