Presidential Workings Group Finds Terror Insurance Market Improves
|October 3, 2006|
Terror Risk Insurance|
A report issued by the President’s Working Group on Financial Markets has concluded that the availability and affordability of terrorism risk insurance has improved since Sept. 11, 2001. Released on Monday, the reported found that the percentage of companies buying terrorism coverage increased to 58 percent in 2005, up from 27 percent in 2003. The cost of the insurance has fallen generally to between 3 to 5 percent of total property insurance costs. The report attributed the improvement in the market to several factors, including better risk measurement and management, improved modeling of terrorism risk, greater reinsurance capacity and a recovery in the financial health of property and casualty insurers. However, the report also noted that these improvements occurred with the presence of the federal backstop.