As the 13-year anniversary of the September 11, 2001 terrorist attack in New York City draws ever closer, the fear of a similar attack is far from waning, while at the same time the insurance implications of the Twin Towers attack are still being felt.
At the end of 2014 the federal Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) is due to come up for renewal, and with its future uncertain, capacity and pricing issues for terrorism insurance buyers are becoming increasingly widespread, according to a statement issued by the Insurance Information Institute (I.I.I.).
Dr. Robert Hartwig, CPCU, economist and president of the I.I.I. recently issued a public statement in which he emphasized the urgent need for Congress to swiftly reauthorize this vital Act, which he explains has proven itself to be a critical component of the country’s national economic security infrastructure. “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, ” Dr Hartwig explained in his statement.
Dr. Hartwig went on to add that in fact TRIPRA represents an example of sound fiscal and economic policy, as it costs taxpayers virtually nothing, well continuing to provide tangible benefits to the U.S. economy in the form of terrorism insurance market stability, affordability and availability.
Many leading figures in the insurance industry concur with Dr. Hartwig’s opinion that should the TRIPRA not be reinstated, terrorism risk insurance would become difficult to source for all manner of business enterprises who want, and, in fact, need, this form of insurance cover.
“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, ” Dr Hartwig has often warned. ”
Almost immediately after the terrorist attacks of September 11, 2001, a knock-on effect was filled with terrorism risk insurance rapidly becoming almost impossible to find or very expensive . Eventually the Congress had no option but to pass the Terrorism Risk Insurance Act in 2002, designed to provide an assurance of government support in the event of a catastrophic attack, a factor which has gone a long way in keeping terrorism risk insurance both available and within feasible financial reach of most businesses.
The impact of the 9/11 terrorist attacks made a substantial dent in the global insurance industry, generating losses of about $32.5 billion at that time, equivalent to $42.9 billion in 2013, making for the largest insurance loss in global history.
A total of 2, 976 people perished in the September 11, 2001 terrorist attacks in New York, Washington, D.C., and Pennsylvania.