Philadelphia, PA (PRWEB) August 13, 2014
The Wharton School of the University of Pennsylvania is pleased to announce release of the report, “TRIA after 2014” by the Wharton Risk Management and Decision Processes Center.
The Terrorism Risk Insurance Act (TRIA) is set to expire at the end of 2014 and is currently under debate in Congress. The full Senate passed S. 2244 in July 2014; the House Financial Services Committee passed H.R. 4871 in June 2014. These bills would modify the current program in different ways.
TRIA affects all corporations in America, large and small. To inform the renewal discussions on the structure of TRIA, the Wharton Risk Management Center is releasing its report, “TRIA After 2014: Examining Risk Sharing Under Current and Alternative Designs.”
The report analyzes the impact of loss-sharing for the different stakeholders under the current program and proposed designs. Our analysis builds on data drawn from over 750 insurers across the United States by analyzing terrorist attack simulations in partnership with the risk modeling firm, Risk Management Solutions, in four states of the U.S.: California, Illinois, New York, and Texas.
As an illustration, should an attack occur in New York City:
The terrorist attacks of Sept. 11, 2001 inflicted $32.5 billion of insured losses ($44 billion in 2014 dollars). After paying these claims, insurers and reinsurers stopped providing coverage for terrorism in the United States unless required to do so. As a result, most businesses operating in the United States found it increasingly difficult to purchase commercial property insurance that included the risk of terrorism. To address this problem, TRIA was passed as a temporary program in 2002 and designed as a risk-sharing partnership between the insurance industry, commercial policyholders and the federal government (taxpayers) covering up to $100 billion of insured commercial losses.
“Over the past decade, our research team at the Wharton Risk Center has published more than 20 studies on terrorism insurance markets based on discussions with many of the key stakeholders interested in these issues in the United States and abroad,” noted Erwann Michel-Kerjan, executive director of the Wharton Risk Center. “We hope this report, TRIA After 2014, assists Congress, the White House, the insurance industry and all commercial enterprises in America to make a more informed decision as to the future of terrorism insurance.”
The report is available online free-of-charge here.
About the Wharton School
Founded in 1881 as the first collegiate business school, the Wharton School of the University of Pennsylvania is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. With a broad global community and one of the most published business school faculties, Wharton creates economic and social value around the world. The School has 5,000 undergraduate, MBA, executive MBA, and doctoral students; more than 9,000 participants in executive education programs annually and a powerful alumni network of 92,000 graduates