You are here:HomeIssuesTerrorism Insurance2014Market Disruption Expected as TRIA Set to Lapse

Market Disruption Expected as TRIA Set to Lapse

Disruption in the terrorism insurance marketplace is expected after a lapse of the Terrorism Risk Insurance Act...
December 23, 2014

Disruption in the terrorism insurance marketplace is expected after a lapse of the Terrorism Risk Insurance Act (TRIA). About 60 percent of large businesses carry terrorism insurance.

Now that TRIA has not been reauthorized, insurers will have the right to cancel terrorism insurance policies after Jan. 1, 2015. It is an open question at this point whether insurers will change coverage mid-term or choose to terminate policies. The effect on the workers' compensation market is expected to be particularly acute.

With insurers no longer be obligated to offer terrorism as part of property cover, this will lead to reduced availability and potentially lower terrorism insurance penetration, reports Business Insurance. "It's going to reduce capacity and availability and certainly will drive up costs," said Howard Mills, chief adviser at the insurance industry group at Deloitte Services L.L.P. and former superintendent of the New York State Insurance Department.

What Does an Expiration of TRIA Mean? (PIA 12/18/14)

Filed under: