The Terrorism Risk Insurance Program, a public/private risk-sharing partnership which is set to expire at the end of 2014, is absolutely critical to maintaining the health of the American economy, according to an updated white paper just released by the Insurance Information Institute (I.I.I.).
The I.I.I.Ã¢â‚¬â„¢s Terrorism Risk: A Constant Threat, Impacts for Property/Casualty Insurers explains that should the federal Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) be allowed to expire at year-end 2014, this would have a detrimental impact on the availability and affordability of terrorism insurance for businesses.
Introducing the paper, Dr. Robert Hartwig, I.I.I. president and an economist says:
The war on terror is far from over, as last yearÃ¢â‚¬â„¢s Boston Marathon bombings and other events around the world attest, but TRIA by all objective measures is now a proven and unqualified success. The program not only succeeded in restoring stability to the countryÃ¢â‚¬â„¢s vital insurance and reinsurance markets in the years immediately following 9/11, but it continues more than a decade later to deliver substantive, direct benefits to millions of businesses, workers, consumers and the overall economyÃ¢â‚¬”all at essentially no cost to taxpayers.Ã¢â‚¬
Industry data shows that the proportion of businesses buying property terrorism insurance (the take-up rate for terrorism coverage) has increased since the enactment of TRIA in 2002. In fact for the last five years, some 60 percent of businesses nationally have purchased terrorism coverage, usually at a reasonable cost.
Dr. Hartwig notes that industries responsible for much of the countryÃ¢â‚¬â„¢s critical infrastructure such as power and utilities, telecommunications and health care, along with financial institutions and local government have take-up rates that approach or exceed 70 percent.
Moreover, the take-up rate for workers compensation is effectively 100 percent, meaning that every worker in America is protected against injuries suffered as the result of a terrorist attack, he adds.