Global Terrorism Insurance Market Keeps Pace With Evolving Threats
New York, NY | May 22, 2019
TRIPRA Remains Crucial to Continued Stability of US Market: Marsh Report
The global property terrorism insurance market remains strong with sufficient capacity to respond to today’s predominant terrorist threats, according to a new report from Marsh, the world’s leading insurance broker and risk adviser. Continued stability of the US property terrorism insurance market, however, is a point of focus as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) is set to expire in 2020.
Published today, Marsh’s 2019 Terrorism Risk Insurance Report explores the state of terrorism and the terrorism insurance marketplace in key regions around the world. This year’s report also includes insurance market insights from Marsh’s World Risk Review ratings platform, which provides risk ratings across nine different perils for 197 countries.
According to the report, the predominant terrorism threat globally remains from extremists focused on inflicting mass casualties in unsophisticated attacks on crowded public spaces rather than large-scale property damage. Over the last few years, the global property terrorism insurance market has responded by expanding coverage – most notably in the development of coverage for active assailant events and non-damage business interruption.
While the overall terrorism market is stable and able to respond to today’s threats, the long-term viability of the US property terrorism insurance market is back in the spotlight. Marsh notes in the report that should Congress allow TRIPRA to expire without a replacement, it could create capacity shortfalls, especially for businesses located in high profile cities and employers with significant workers’ compensation accumulations.
“The existence of government backstops, like TRIPRA, has played an important role in ensuring the continued stability and health of the global property terrorism insurance market,” said Tarique Nageer, Terrorism Placement Advisory Leader, Marsh. “TRIPRA is in place until December 31, 2020, and all eyes are on the Congressional schedule as we approach this deadline.
“In the meantime, US businesses and organizations are advised to work with their brokers as soon as possible to map out a strategy to mitigate potential disruption.”
Other key findings from this year’s report include:
- From May 2018 through May 2019, terrorism risk ratings fell across 116 countries, most notably in Egypt, Turkey, and Spain. Little improvement, however, occurred in the world’s riskiest states for terrorism, including Afghanistan, Yemen, and Iraq.
- The number of Marsh-managed captives actively underwriting one or more insurance programs that access TRIPRA increased 10% to 182 captives in 2018.
- The number of US companies purchasing terrorism coverage embedded in property policies under TRIPRA remained consistent at 62% in 2018.
- Education entities, media, financial institutions, and real estate companies had the highest terrorism insurance take-up rates by industry in 2018.
Marsh is the world’s leading insurance broker and risk adviser. With over 35,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data driven risk solutions and advisory services. Marsh is a business of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue approaching US$17 billion and 76,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobal; LinkedIn; Facebook; and YouTube, or subscribe to BRINK.