Bi-partisan support from the US Senate regarding the renewal of TRIA is encouraging and will likely help to deliver stability to the market and transfer terrorism risk away from taxpayers.
That is the view from Marsh, which has applauded the Senate’s decision to advance the Terrorism Risk Insurance Program Reauthorization Act.
Marsh says that it considers the programme to be “a model private-public partnership and insurance markets, particularly in workers’ compensation and property”.
The new legislation—introduced by Senators Schumer, Reed, Murphy, Heller, Kirk, and Johanns—extends the existing programme for seven years, which has been in place since the tragic events of September 11th.
An extension will allow US insurers to continue to take advantage of the federal backstop for conventional terrorism as well as for nuclear, biological, chemical and radiological attacks.
Marsh says that swift reauthorisation is critical as terrorism insurance take-up has continued to rise. The broker says that demand for such coverage remains strong and is growing in key markets.
TRIPRA is widely supported by the market, although it is evident from talking with re/insurers that they are keen to bring more conventional terrorism risk into the commercial market.
It remains to be seen what form the final bill will take—with some suggesting that deductibles and terms may change—but it is apparent that there is still political appetite to retain terrorism risk federally.
We recently spoke with Jeff Clements of Validus Re about the extension. You can read his thoughts here.