The number of Marsh-managed captive insurance companies that accessed the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) to write property, workers’ compensation, general liability, and cyber risk rose 10 percent in 2018, according to a Marsh report.
The 2019 Terrorism Risk Insurance Report revealed that 182 Marsh-managed captives accessed TRIPRA to write coverages for their parent companies last year, up from 166 in 2017.
The report notes that captive owners have often found the total cost of implementing terrorism insurance programmes compares favourably to the cost of buying from commercial insurers.
In the report, Marsh suggested that while commercial insurance policies often restrict coverage for nuclear, biological, chemical, and radiological events, contingent time-element losses, and cyber terrorism, captives can offer broader coverages.
Additionally, the report suggests that the US terrorism insurance market is stable, however, potential issues may be caused if TRIPRA, which is set to expire in 2020, is not renewed.
Tarique Nageer, terrorism placement advisory leader, Marsh, commented: “The existence of government backstops, like TRIPRA, has played an important role in ensuring the continued stability and health of the global property terrorism insurance market.”
Nageer added: “TRIPRA is in place until December 31, 2020, and all eyes are on the Congressional schedule as we approach this deadline.”
“In the meantime, US businesses and organisations are advised to work with their brokers as soon as possible to map out a strategy to mitigate potential disruption.”
