When the twin towers fell on 9/11, insurance carriers paid out claims of 44 billion dollars, and then decided they really didn’t want to insure tall buildings in Manhattan against terrorism anymore, thank you very much.
Alarmed, the US government created TRIA, the Terrorism Risk Insurance Act, a government-funded backstop for private insurance carriers offering terrorism policies. In the event of another terrorist attack resulting in insured losses of more than $180 million (in 2018), TRIA will pay up to $100 billion—with a “b”—in the event of a large-scale terrorist attack, as officially certified by the US government.
The US modeled TRIA on Pool Re (the “Re” is for reinsurer), a similar program pioneered by the UK following IRA bombings in the early 1990s, including the 1993 IRA bombing at Bishops Gate, then the costliest terrorist attack of all time with losses of more than a billion dollars. In the event of a terrorist attack in the UK, Pool Re pays out to the affected insurance carriers once losses exceed a certain threshold.
Today, governments and insurance carriers are struggling with how to insure against similar acts of terrorism—depending on your…
