Industry reacts to vote to renew US terrorism insurance act
Industry leaders have been reacting to the news that the US Congress has voted overwhelmingly in favor or reauthorizing the Terrorism Risk Insurance Act for six years. The vote stalled before Christmas after a senator objected but passed through both houses of Congress on Wednesday. The act will also create the new National Association of Registered Agents and Brokers (NARAB II) which aims to streamline licensing of insurance producers. Monica J. Lindeen, president of the National Association of Insurance Commissioners commended Congress for their decision: “Both TRIA and NARAB II have been priorities for the NAIC, and their passage this week is a reflection of the strong bipartisan support in Congress for both initiatives.” Senator Ben Nelson, NAIC CEO added: “The six-year renewal will bring much needed market stability to commercial policyholders, lenders, builders and businesses.” Mike Foley of Zurich North America also praised the decision: “The reforms strike a workable balance between the necessary role of government in terrorism and the capacity that commercial insurance can provide." The proposed legislation will now head to the President who is expected to sign it.
Warnings of further terror attacks following Paris atrocity
With France reportedly close to catching the brothers accused of carrying out the Paris terrorist atrocity western governments have been warning of further attacks. The US government warned at the weekend that US associated hotels could be targeted in Indonesia and the Australian government has warned travellers about risks of terrorism in all parts of India. In the UK the head of intelligence service MI5 has acknowledged that it may not be possible to avoid all attacks. Meanwhile an academic has warned that policies on protecting locations need to be more flexible. Professor Mehmet Gumus of Desautels Faculty of Management says that governments need to allow funds for analysis of terrorists’ behaviours. He says that organized attacks are different in their operation from unorganized ones. Specifically the professor says that protecting locations assessed at most at risk works best for unorganized attacks whereas planned attacks require all locations to be protected equally. He says: “The issue is that governments have finite budgets, so if they choose just one strategy and it’s used incorrectly against a terrorist threat, the repercussions could be huge. Time, effort and resources need to be invested in intelligence data, its continuous collection is so important to categorise terrorists and the best ways to limit damage. Defence strategies need to be flexible to take this into account.”
Brokers and agents continue to dominate European market
A new report from Insurance Europe provides a snapshot of the region’s insurance market. Using data from 2013, the report shows that life insurance claims fell while non-life increased. Insurance firms in Europe paid out a total of 952 billion euros in 2013, that’s 2.6 billion a day. The report also highlights that agents and brokers continue to dominate the market in non-life insurance with up to 80 per cent of all policies arranged that way.
