Lloyd’s chairman Lord Levene has said that the insurance industry is ready for a $100 billion “mega-catastrophe” in the United States.
He also called for the US to confirm its stance on the Terrorism Risk Insurance Act (TRIA), which makes the government the ultimate insurer should private insurers be unable to cope with a large-scale terrorist attack.
“At Lloyd’s, we believe a $100 billion natural mega-catastrophe is getting closer and could hit anywhere on the Atlantic coast of the United States,” he said, pointing out that the US is Lloyd’s’ biggest market with $12 billion premiums written in 2006.
Speaking on Wednesday at a Royal United Services Institute conference on “Delivering Resilience”, Lord Levene suggested four tasks for the insurance industry: “raising risk awareness, encouraging tangible risk management action, engaging through greater risk partnership, and investing in risk research.”
A bill currently on the floor of the US House of Representatives proposes to expand TRIA’s coverage of foreign and domestic terrorism, and provide group life insurance. However, President Bush has threatened to veto it.
“I can understand the U.S. government having concerns about it, but from the industry's point of view we need to know where we stand,” he told Reuters.
