Insurance - - INDUSTRY UPDATES -

Source: in­sur­ance­news.com.au, 18 Novem­ber 2013

Insurance In­for­ma­tion In­sti­tute Pres­i­dent Robert Hartwig has out­lined the im­por­tance of the Ter­ror­ism Risk Insurance Act (TRIA) to the US House of Rep­re­sen­ta­tives. TRIA was in­tro­duced in 2002 as ter­ror­ism cover fell away fol­low­ing the Septem­ber 11, 2001, at­tacks. It is due to ex­pire at the end of next year. The gov­ern­ment pro­gramme, which has al­ready been ex­tended twice, pro­vides rein­sur­ance cov­er­age in the event of ma­jor losses. Tes­ti­fy­ing be­fore an insurance sub-com­mit­tee, Hartwig ar­gued TRIA’s ex­pi­ra­tion would re­sult in a US$69 bil­lion (MYR322.52 bil­lion) hit to real GDP within three years. About 290,000 jobs would be lost and US$798 bil­lion (MYR2,573.46 bil­lion) would be shaved off house­hold net worth. Hartwig says it is “vir­tu­ally cer­tain” ter­ror­ism ex­clu­sions will soon reap­pear. Many other na­tions, in­clud­ing Aus­tralia, the UK, France and Ger­many, have pro­grams sim­i­lar to TRIA and none are con­sid­er­ing dis­con­tin­u­ing them, he told the House. Hartwig adds that ter­ror­ism risk re­mains essen­tially unin­sur­able due to the in­abil­ity to pre­dict events’ fre­quency or sever­ity.

(US$1.00 = MYR3.22)

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