U.S. experiences increase in terrorism insurance uptake in 2009

Terrorism insurance uptake in the United States increased last year, from 57% in 2008 to 61%, despite a challenged economy, reports Marsh.
Marsh surveyed 1,382 of its clients, and found the number of firms purchasing this type of insurance has steadily climbed over the years, from 27% in 2003.
Utility, real estate, health care, transportation, financial institutions and media companies purchased property terrorism insurance at the highest rates of the 15 industry segments reviewed, with take-up rates in each sector exceeding 70%, the survey found.
Smaller companies (total insured value less than $100 million) spent 22% of total property premiums on terrorism coverage in 2009. Spending was significantly lower for larger companies (total insured value ranging from $100 million to $500 million) at 5%, and for companies with $500 million to $1 billion this figure was 7%.
Construction, hospitality, utility and real estate companies experienced the highest median premium rates, exceeding $50 per million of total insured value.
Capacity in the standalone terrorism insurance market is approximately $3.76 billion, the report says.
“Terrorism risk remains a critical concern for global companies,” said Ben Tucker, a senior vice president in Marsh’s property practice. “Recent attempts in New York’s Times Square and on a Detroit-bound flight on Christmas Day 2009 remind companies of the importance of securing adequate financial protection against the possible catastrophic impact of terrorist events.”