Aon's Crisis Management division has issued an update on the standalone terrorism market.
Over the past four years, rates in the market have fallen by between 40% and 50%, as a result of capacity growth to US$1.3bn, a favourable claims to premium ratio and increased competition.
Aon indicates the market has matured at a great rate since the turmoil caused by the terrorist attacks in the US on 11 September 2001. While the US remains the biggest market, the demand for terrorism risk is growing in other parts of the world.
Will Farmer, director at Aon Crisis Management, said: “The lack of any knee jerk reaction to the Madrid commuter train attacks and the events in London in July last year demonstrates the stand-alone insurance market's maturity. The debate over the extension of the Terrorism Risk Insurance Act (TRIA) at the end of last year highlighted the market's growing importance. While government backed schemes such as TRIA have assisted in providing terrorism capacity, their effectiveness varies. The necessity of such schemes in countries where the private market is able to meet demand is questionable. The stand-alone market has a very important role to play going forward.”
