Terrorism and Insurance: 13 Years After 9/11 The Threat of Terrorist Attack Remains Real

I.I.I. Has Experts and Resources for Reporters Doing Stories on Terrorism Insurance



New York Press Office: (212) 346-5500; media@iii.org

NEW YORK, September 9, 2014 — The year-end expiration of the federal Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), and its uncertain future, is creating capacity and pricing issues for terrorism insurance buyers, according to the Insurance Information Institute (I.I.I.).


“The 13-year anniversary of the September 11, 2001, terrorist attack—coming just ahead of TRIPRA’s looming December 31 expiration date—is a reminder of the urgent need for Congress to swiftly reauthorize this vital Act, which has proven itself to be a critical component of the country’s national economic security infrastructure,” explained Dr. Robert Hartwig, CPCU, economist and president of the I.I.I. “Moreover, recent and explicit threats to American interests around the world from new terrorist organizations, including Islamic State (ISIS), demonstrate that the need for the program is greater than at any time in the past several years,” he added.


Dr, Hartwig also pointed out that TRIPRA is sound fiscal and economic policy. ”TRIPRA costs taxpayers virtually nothing, yet it continues to provide tangible benefits to the U.S. economy in the form of terrorism insurance market stability, affordability and availability,” he explained. “The availability and pricing of terrorism insurance is currently tightening given uncertainty over reauthorization, and because of the unique nature of terrorism risk and the possibility for virtually unlimited losses, private insurance markets do not have the capacity to cover terrorism losses to the extent possible under TRIPRA.”


Dr. Hartwig noted that, in the absence of TRIPRA, terrorism risk insurance would be less available to businesses of all sizes who want, and need, these policies. “Without the federal government’s insistence that insurers make terrorism coverage available to all who want it, terrorism risk insurance policies will be more costly and/or limited in scope,” he warned. “TRIPRA is a critical part of the U.S. economy’s security infrastructure and would ensure a swift recovery in the event of significant terrorist attack.”


In the wake of the terrorist attacks of September 11, 2001, terrorism risk insurance quickly became either unavailable or very expensive. Congress reacted by passing the Terrorism Risk Insurance Act in 2002, which provides an assurance of government support after a catastrophic attack. This has helped keep terrorism risk insurance available and affordable for businesses.


For property/casualty insurers and reinsurers, the impact of the 9/11 terrorist attacks was substantial, producing insured losses of about $32.5 billion, or $42.9 billion in 2013 dollars—the largest insurance loss in global history at the time. Losses were paid out across many different lines of insurance, including property, business interruption, aviation, workers compensation, life and liability.


A total of 2,976 people perished in the September 11, 2001, terrorist attacks in New York, Washington, D.C., and Pennsylvania, excluding the 19 hijackers. Total insured losses (including liability losses) from the terrorist attacks on the World Trade Center and the Pentagon were about $39.4 billion (in 2009 dollars), including property, life and liability insurance claim costs. The total loss does not include the March 2010 settlement of up to $657.5 million announced by New York City officials and plaintiffs’ lawyers, which was designed to compensate about 10,000 workers whose health was damaged during the rescue and cleanup at the WTC. (Loss estimates may differ from estimates calculated by other organizations.)

Top 20 Costliest Terrorist Acts by Insured Property Losses

(2021 $ millions)

Rank Date Country Location Event Insured property
loss (1)
(2021 $ millions)
1 September 11, 2001 U.S. New York, Washington DC,
Hijacked airliners crash into
World Trade Center and Pentagon
$28,862 (2) 2,982
2 April 24, 1993 U.K. London Bomb explodes near NatWest tower
in the financial district
1,394 1
3 June 15, 1996 U.K. Manchester Irish Republican Army (IRA) car bomb
explodes near shopping mall
1,143 0
4 April 10, 1992 U.K. London Bomb explodes in financial district 1,031 3
5 February 26, 1993 U.S. New York Bomb explodes in garage of World Trade Center 961 6
6 July 24, 2001 Sri Lanka Colombo Rebels destroy 3 airliners, 8 military aircraft and
heavily damage 3 civilian aircraft
612 20
7 February 9, 1996 U.K. London IRA bomb explodes in South Key Docklands 398 2
8 June 23, 1985 North Atlantic Irish Sea Bomb explodes on board of an Air India Boeing 747 249 329
9 April 19, 1995 U.S. OK, Oklahoma City Truck bomb detonates outside government building 223 166
10 September 12, 1970 Jordan Zerqa, Dawson's Field
(disused RAF airstrip in desert)
Hijacked Swissair DC-8, TWA Boeing 707,
BOAC VC-10 dynamited on ground
195 0
11 September 6, 1970 Egypt Cairo Hijacked PanAm B-747 dynamited on ground 170 0
12 April 11, 1992 U.K. London Bomb explodes in financial district 147 0
13 November 26, 2008 India Mumbai Attack on two hotels; Jewish center 130 172
14 March 27, 1993 Germany Weiterstadt Bomb attack on a newly built, still unoccupied prison 108 0
15 December 30, 2006 Spain Madrid Bomb explodes in car garage at Barajas Airport 89 2
16 December 21, 1988 U.K. Lockerbie Bomb explodes on board of a PanAm Boeing 747 87 270
17 July 25, 1983 Sri Lanka   Riot 73 0
18 July 7, 2005 U.K. London Four bombs explode during rush hour in the London Underground and bus 72 52
19 November 23, 1996 Comoros Indian Ocean Hijacked Ethiopian Airlines Boeing 767-260 ditched at sea 69 127
20 March 17, 1992 Argentina Buenos Aires Bomb attack on Israel's embassy in Buenos Aires 58 24

(1) Includes bodily injury and aviation hull losses. Updated to 2021 dollars by the Insurance Information Institute using the U.S. Bureau of Labor Statistics CPI Inflation Calculator.
(2) Differs from inflation-adjusted estimates made by other organizations due to the use of different deflators.

Source: Swiss Re, U.S. Bureau of Labor Statistics, Insurance Information Institute.

View Archived Tables

With TRIPRA scheduled to expire at the end of 2014, both houses of Congress have been discussing legislation that would set out the federal government’s involvement in funding potential terrorism losses. In July, the Senate passed a bipartisan seven year TRIA reauthorization bill (S. 2244) by a vote of 93.4, but the House did not take up its version of a TRIA reauthorization bill before the August recess. Prospects are increasing that the issue of TRIA's reauthorization will not be resolved until the Lame Duck session after the 2014 election.


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Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org

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