For insurance, the risk must be measurable. Insurers must be able to determine the possible or probable number of events (frequency) likely to result in claims and the maximum size or cost (severity) of these events. In case of acts of terrorism losses are intentional, terrorism risk doesn’t have these characteristics for easily ‘insurable risk’ therefore many countries have adopted model in which insurers pay premiums into the pool which is back-stopped by the government. Example France Government-owned Caisse Central de Reassurance (CCR), In UK the government acts as the reinsurer of last resort, guaranteeing payments above the industry retention.
The structure of this program has encouraged the development of reinsurance for the layers of risk that insurers must bear themselves—deductible amounts and coinsurance—which in turn allows primary insurers to provide coverage. Without TRIA, there would be no private market for terrorism insurance.
It wishful thinking of everyone that there are no terrorist activities and no data available for insurance companies to measure this risk and we do not need such program.
But process of phasing out of TRIA is necessary after few years, how many years is still debatable?
Okay, time to put the acronym nerds in their place again. First of all, congrats to the headline editor for correctly stating that it is TRIA we are talking about here.
The entire industry knows it as TRIA. Therefore, it will always be TRIA. Despite the title of the latest extension bill, it is TRIA…not TRIPRA or TRIEA or any other set of initials.
Those who would leap like lemmings to change acronyms 1) need to get a life and 2) are the kind of people who save string and carry their coins in a change purse.
No name,
Please do your research before you continue to rant aimlessly.
1) Terrorism insurance is an optional coverage which can be purchased.
2) There is a very good reason that the private markets are applauding the extension of this act. While the insurance companies and Government may be collecting money now, I would say that an event that triggers this act will cause more to be paid in claims then have been collected in premium.
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For insurance, the risk must be measurable. Insurers must be able to determine the possible or probable number of events (frequency) likely to result in claims and the maximum size or cost (severity) of these events. In case of acts of terrorism losses are intentional, terrorism risk doesn’t have these characteristics for easily ‘insurable risk’ therefore many countries have adopted model in which insurers pay premiums into the pool which is back-stopped by the government. Example France Government-owned Caisse Central de Reassurance (CCR), In UK the government acts as the reinsurer of last resort, guaranteeing payments above the industry retention.
The structure of this program has encouraged the development of reinsurance for the layers of risk that insurers must bear themselves—deductible amounts and coinsurance—which in turn allows primary insurers to provide coverage. Without TRIA, there would be no private market for terrorism insurance.
It wishful thinking of everyone that there are no terrorist activities and no data available for insurance companies to measure this risk and we do not need such program.
But process of phasing out of TRIA is necessary after few years, how many years is still debatable?
Okay, time to put the acronym nerds in their place again. First of all, congrats to the headline editor for correctly stating that it is TRIA we are talking about here.
The entire industry knows it as TRIA. Therefore, it will always be TRIA. Despite the title of the latest extension bill, it is TRIA…not TRIPRA or TRIEA or any other set of initials.
Those who would leap like lemmings to change acronyms 1) need to get a life and 2) are the kind of people who save string and carry their coins in a change purse.
No name,
Please do your research before you continue to rant aimlessly.
1) Terrorism insurance is an optional coverage which can be purchased.
2) There is a very good reason that the private markets are applauding the extension of this act. While the insurance companies and Government may be collecting money now, I would say that an event that triggers this act will cause more to be paid in claims then have been collected in premium.
Now caffiend, that is bordering on rational and we can’t have that on IJ comment boards. This is for the ranting of crazies! Happy New Year!