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Volume 30, Issue 1

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Tuesday, 14 May 2013 14:54

Marsh Report Shows Continued Demand for Terrorism Coverage

As the current Terrorism Risk Insurance Act (TRIA) moves closer to its scheduled expiration date of December 31, 2014, the debate is heating up over whether the federal backstop remains necessary and whether the market demand for terrorism coverage still exists. According to the Marsh 2013 Terrorism Risk Insurance Report, released April 30, demand for coverage has remained both steady and strong. These results only reinforce the need for a long-term extension of the terrorism backstop.

During the first full year of TRIA, only 27% of organizations obtained terrorism coverage as the market was still adjusting to the TRIA program and the fallout from the 9/11 attacks. Since that time, take-up rates have grown steadily. By 2005 the take-up rate for terrorism insurance was 58%. Today the rate is more than 60%—where it has been since 2009. The take-up rates are highest among companies with total insured value (TIV) over $500 million, but even those companies with less than $100 million in TIV obtained terrorism insurance at a 59% rate in 2012.