The US government must renew the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), due to expire on December 31 next year, according to Tarique Nageer, a property terrorism placement and advisory leader at Marsh.
Testifying before the US Senate committee on banking, housing and urban affairs on Tuesday, Nageer said: “Terrorism remains an evolving, expanding, and ever-present risk in the US, which underscores the importance of the Terrorism Risk Insurance Program (TRIP) and its role in ensuring the continued stability and health of the terrorism insurance markets.”
He warned the committee that the US cannot afford to be complacent with regards to the program’s reauthorsation.
Many companies of all sizes and across all sectors purchase terrorism insurance in the US, added John Doyle, president and CEO at Marsh, an insurance and risk advisory company. “These organisations depend on the program to thrive and protect their workforce. We strongly support the reauthorisation of TRIPRA.”
But captives could be hit particularly hard if TRIP expires, with capacity shortfalls especially acute for businesses with significant workers’ compensation accumulations, according to Marsh’s 2019 Terrorism Risk Insurance Report, published in May.
It found that in 2018, 182 Marsh-managed captives accessed TRIPRA to write property, workers’ compensation, general liability and cyber risk for their parent companies.
Emil Metropoulos, workers’ compensation and terrorism centre of excellence practice leader at Guy Carpenter, said: “Uncertainty about TRIPRA’s future is already prompting insurers and terrorism insurance buyers to seek additional reinsurance limits and coverages, on the assumption that there will be limited capacity available in the private market.”
Marsh, TRIPRA, Tarique Nageer