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Marsh warns against US terror backstop complacency

Terrorism is an evolving and expanding risk and a government reinsurance backstop remains vital, Marsh & McLennan has warned US politicians.

In testimony before the US Senate Committee on Banking, Housing and Urban Affairs, it warned the ever-present risk underscores the importance of ensuring the stability of insurance markets.

The US Terrorism Risk Insurance Program Reauthorisation Act (TRIPRA) is due to expire at the end of 2020.

“We cannot afford to be complacent with regards to the program’s reauthorisation,” the group’s Property, Terrorism Placement and Advisory Leader Tarique Nageer said. “It has been essential and effective in making terrorism insurance available and commercially viable in the US.”

Marsh says expiration or renewal with significant increases in retentions will lead to capacity shortfalls, with high-profile businesses, top business districts and larger employers including universities, hospitals and hospitality companies most affected.

“Time is of the essence,” Mr Nageer said. “If modifications to TRIPRA are to be considered, it is imperative for the industry to have ample time to prepare for and implement the changes.”

Marsh CEO John Doyle says the breadth of clients buying terrorism insurance in the US is considerable and ranges across companies in every sector, of all sizes.

“These organisations all depend on the program to thrive and protect their workforce,” he said. “We strongly support the reauthorisation of TRIPRA.”