TRIPRA Remains Crucial to Continued Stability of US Market: Marsh Report
New York, NY (May 22, 2019) – 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.
Access the full report: Marsh 2019 Terrorism Risk Insurance Report.
Introduction
Terrorism remains a dynamic global risk and a serious threat for people and organizations. The evolution of terrorism risk exposes many countries to complex threats from both international and home-grown groups, as well as individuals acting on their own, known as “lone wolves.”
Ebbs and flows in terrorism are common, but the evolving and ever-present nature of this risk requires people and organizations to be continuously on guard. \
The means and perpetrators of terrorist attacks continue to shift, with soft or relatively unprotected targets becoming more of a focal point. In response, insurers are continuing to develop and offer new and innovative solutions for risk professionals, who have been challenged to adopt new strategies to protect properties, employees, and balance sheets in response to constantly evolving threats. The market for property terrorism insurance remains competitive for most buyers, due in recent years to a steady decline in the number of global terrorist incidents and minimal insurance claims.
In the US, attention will soon turn to Congress as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) approaches expiration at the end of 2020. TRIPRA, as with similar public-private mechanisms in other countries, has played an important role in ensuring the continued stability and health of the property terrorism insurance market, and Marsh will continue to monitor developments regarding its renewal.
Our Terrorism Risk Insurance Report explores the state of terrorism and the terrorism insurance marketplace in key regions. In this year’s report, you will find insurance market insights and data and rankings from Marsh’s World Risk Review ratings system.
We hope you find this report to be useful as you take steps to manage your terrorism risk.
North America
The US continues to be a high-risk target for terrorism. Soft targets such as transport systems and public events will be at the highest risk of attack. The threat level in Mexico and Canada is greatly reduced, though the risk of lone wolf attacks in Canada remains.
Terrorism in the US is more likely to be carried out by lone wolves and small groups inspired by, but not directly affiliated with, international terrorist organizations. However, the threat from the ERW continues to increase. Across both far-right and Islamist extremist attacks, the availability of firearms in the US will likely make active shooter incidents a continuing threat (see Figure 11). Mass shootings such as those at an Orlando nightclub in 2016 and a music festival in Las Vegas in 2017 have increased interest in insurance coverage relating to active shooter threats.
Terrorism risks in Canada have been greatly reduced over the last five years, though the threat from Islamist extremists and the ERW still present a danger. In Mexico, Islamist terror organizations have little presence, and the threat level to both businesses and individuals is minimal.
Most commonly used weapons in terrorist attacks in North America, 2014-2018
Key Terrorist Actors In 2019
- Islamist terrorism: lone wolf or small terrorist cells
- Extreme right-wing: individuals or groups
Which Sectors Are Most Exposed?
- Commercial Businesses – Businesses in densely populated urban areas, such as New York and Toronto, may look to non-damage denial of access and non-damage loss of attraction cover to mitigate lowcapability attacks on public areas (see Figure 12). For example, in April 2018, an attack using a vehicle in Toronto’s North York City Centre killed 10 pedestrians and injured 16 others. The incident forced a rerouting of public transport services away from the central business district and the police cordon closed access routes for a number of businesses for up to 48 hours.
- Transport – Transport infrastructure poses a target for terrorists across North America, exemplified by the detonation of a pipe bomb in a New York subway station by an Islamist extremist in 2017 that injured four people. Mail bomb packages have unsuccessfully targeted densely populated subway stations in Toronto over the last two years, including an incident in March 2019.
Potential terrorism targets in North America, 2014-2018
For more, including global terrorism insurance market trends, terrorism trends, details for other regions, and Marsh’s recommendations, access the full report.
Full Report
Access the full report: Marsh 2019 Terrorism Risk Insurance Report.
About Marsh
Marsh is the world’s leading insurance broker and risk adviser. With more than 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 wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue of more than US$15 billion and 75,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading firms: Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
Source: Marsh
Tags: Marsh, terrorism
