Guy Carpenter terrorism report: Tripra Renewal needed

19.06.2014 – The latest report on global terrorism released by Guy Carpenter emphasizes the vital role the Terrorism Risk Insurance Program Reauthorization Act (Tripra) plays in the United States ensuring the availibilty and affordability of terrorism (re)insurance capacity throughout the country. The (re)insurance sector does not have the capital necessary to withstand certain high-loss scenarios that involve nuvlear, biological, chemical or radiological weapons.

The global terrorism landscape has undergone significant change since the attacks of Septmeber 11, 2001 as improved intelligence and effective counter-terrorism operations have prevented repeat attacks of that scale. The volatile landscape in Middle Eastern countries, Syria and Iraq in particular, as well as North African countries, will have important consequences on the future of the international terrorist threat. The spillover of violence is a clear risk in 2014 and beyond.

“Despite a significant increase in the number of global terrorist attacks and fatalities over the past five years, evolving capacity and the absence of a major terrorism loss for reinsurers have resulted in a softening of the terrorism reinsurance market in areas with less perceived risk”, said Aaron Bueler, Managing Director and Leader of Guy Carpenter’s Workers Compensation Practice an Terrorism Task Force. While regionalized terrorism and political violence activityhas impacted certain facultative programs and affected pricing and capacity at the local level, adequate terrorism capacity continues to be available in the resinsurance treaty marketplace for certain countries and territories.

The US market continues to be challenged by the uncertainty over the potential expiration of Tripra on December 31, 2014. Either substantial modification or non-renewal of Tripra has the potential to impact terrorism coverage in the United States. „We are encouraged by the recent legislative activity addressing the expiration of Tripra and hope for continued progress and a final bill in the near future”, said Bueler. (vwh)

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