Two industry analyses on the potential industry impact of theTerrorism Risk Insurance Act extension warn insurers that they needto reassess their exposure strategies and that TRIA ramificationscould include a capacity shortage in some areas.
Reports by AIR Worldwide Corporation and insurance broker Marsh,a subsidiary of Marsh & McLennan Companies, detail the changesmade under the TRIA extension bill, which increased thecertification trigger for insurers and decreased the percentage ofthe federal government's share of loss over the next two yearsbefore the act sunsets.
(The certification trigger==the level of damage at which thefederal terrorism insurance backstop kicks in--will increase fromthe current $5 million to $50 million in 2006 and $100 million in2007. Deductibles and co-participation percentages of insurers willbe increased in each year as well.)
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