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Demand for Terrorism Insurance Increases

Although Congressional action on the Terrorism Risk Insurance Act is uncertain, demand for terrorism insurance in the private market has increased, leading to an increase in capacity and lower rates by up to 40 percent in some locations due to higher competition...
October 17, 2014

Although Congressional action on the Terrorism Risk Insurance Act (TRIA) is uncertain, demand for terrorism insurance in the private market has increased, leading to an increase in capacity and lower rates by up to 40 percent in some locations due to higher competition. However, rates remain flat in cities considered at the greatest risk of attack, according to a report by Business Insurance.

Many expect Congress to consider TRIA during the lame-duck session after the November midterm elections, but if Congress fails to act, disruption in the private terrorism insurance market could occur as buyers rush to buy affordable coverage without the TRIA backstop. Meanwhile, outside of peak peril zones, competition has increased and reduced prices, though capacity remains tight in New York, Chicago and San Francisco, among others.

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