Aon has called for the US Terrorism Risk Insurance Act to be renewed before its expiration date at the end of 2005.
A study released by the company said 57% of companies have taken out some sort of terrorism insurance since the events of 09/11.
The White Paper analyses the terrorism coverage available in detail.
The company said TRIA created a new line of insurance cover, providing three-year federal ‘back stop' reinsurance up to an aggregate limit of $100bn, and requiring insurers to make TRIA coverage available to policyholders.
The cover, it said, has become “increasingly desirable for business.” But, with its expiration edging nearer, the company said the industry “cannot afford to postpone its renewal.”
The study states: “TRIA's importance as a backstop cannot be overstated.
“Its expiration will cause an immediate and significant diminution of the available supply of terrorism capacity that is likely to leave the market hard pressed, if not unable, to meet the potential demand for risk transfer capacity.”
