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The US Treasury lacks sufficient data on the terrorism insurance market needed to help ensure the goals of the Terrorism Risk Insurance Act (TRIA), due to expire at the end of this year.
This is according to a report by the US Government Accountability Office (GAO).
The report found that comprehensive data on the market is not readily available and the Treasury’s analysis to better understand federal fiscal exposure under various scenarios has been limited.
“However, without more data and analysis, the Treasury lacks the information needed to help ensure the goals of TRIA of ensuring the availability and affordability of terrorism risk insurance and addressing market disruptions are being met and to better understand potential federal spending under different scenarios,” the report says.
It did report however that available data shows that terrorism insurance premiums and other market indicators are stable.
It explains, “For example, estimated terrorism insurance premiums have been relatively constant since 2010. Insurers told GAO that, in 2012, terrorism insurance premiums made up on average less than 2 percent of commercial property and casualty premiums. According to industry participants, prices for terrorism coverage have declined, the percentage of businesses buying coverage seems to have levelled recently, and insurers' ability to provide it has remained constant.”
Terrorism, TRIA, US Treasury, GAO