Buyer’s Market: Low Terrorism Insurance Pricing Despite Rising Instability

Terrorism insurance pricing in the U.S. is hovering at an all-time low — a surprising reality at a time when geopolitical tensions, domestic extremism, and global instability dominate headlines.

It comes down to the age-old dynamic of supply and demand, according to Peter Bransden, head of crisis management, North America, at Willis.

“Terrorism insurance has been a profitable line of business for insurers,” Bransden told Insurance Journal. “There has not been a market-moving loss in the U.S. in 25 years.”

Bransden said U.S. standalone terrorism insurance capacity has increased to more than $2 billion, with additional support from London. Competition has intensified between emerging and incumbent insurers, and prices have decreased. According to WTW’s U.S. Terrorism Insurance Index, U.S. placements in the fourth quarter 2025 saw an average price reduction of 10.4%.

Fourteen insurers now operate in the U.S. terrorism insurance market, with over 25 individual underwriters dedicated to the class, said WTW.

However, the pricing environment doesn’t necessarily reflect a decline in the threat.

“Not all of the costs involved in mitigating or facing terrorism violence are being transferred in a traditional terrorism policy,” Bransden said. Traditionally, terrorism coverage is plugged into a physical-damage property policy but the modern landscape has evolved beyond property damage to include human casualties, preparedness and response, liability, medical costs, and reputational exposures from attack sources such as civil commotion, riots, cyber, nuclear, biological, or radiological that may have been deemed esoteric or uninsurable.

The profitability in the marketplace has allowed it to innovate to meet these risks, and clients are encouraged to used the favorable pricing environment to bolster terrorism and political violence coverage. Options in the marketplace do not require a terroristic motivation, which can be used for active-shooter events, for example.

“Don’t fall into the trap of just capturing the savings and thinking that it’s business as usual,” Bransden said. Risk managers should use the savings to buy coverage that reflects the threats of today, he added. Advanced analytics can help organizations better quantify exposure and tailor limits accordingly.

“Make sure you’re not just transferring balance-sheet risk, but are also utilizing the insurance market to bolster security preparedness and crisis response.” Bransden said.

Another factor shaping the conversation is the pending 2027 expiration of the federal Terrorism Risk Insurance Act (TRIA). While few in the industry expect TRIA to lapse — and Congress has already begun work on an extension — contingency planning is underway. Standalone capacity remains robust, and sunset clauses are available for long-term projects to address potential federal backstop changes, Bransden said.