A.M. BestTV: Changes in Terror Tactics Force Insurers to Adapt, Say A.M. Best Analysts

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FOR IMMEDIATE RELEASE

OLDWICK - MAY 23, 2018 10:44 AM (EDT)
In this A.M. BestTV episode, Angelo Lozano, financial analyst, and David Blades, senior research analyst, A.M. Best, discuss a new Best’s Special Report that examines how insurers are using stress testing, limits and reinsurance to address the changing nature of terror risk. Click on http://www.ambest.com/v.asp?v=tripra518 to view the entire program.

Lozano addressed the different loss impact scenarios from terrorism that insurers currently face, based on size and scope.

“The loss impact scenarios have changed over the years as the protection under the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) has decreased,” said Lozano. “The large carriers, which carry a surplus of $500 million or greater, have large exposures, while the smaller and medium size carriers are unlikely to accrue losses that would satisfy the $160 million TRIPRA program trigger.”

Blades highlighted how insurers have adjusted their product offerings and coverages as a result of the changing scope of terror attacks.

“Definitely, modelers and insurers have adjusted the way they look at and model terrorism,” said Blades.

“Modelers are updating their overall models from a deterministic standpoint to take a what-if look as well as a probability look at terrorism events. Additionally, modelers and insurers are putting more resources into the overall geographic concentration risks and how to look at them.”

To access a copy of this special report, titled, “Insurers Adjust to Changing Terrorism Risk Landscape,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=272625 .

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