The Economic Effects of Federal Participation in Terrorism Risk

  title={The Economic Effects of Federal Participation in Terrorism Risk},
  author={Robert Glenn Hubbard and Bruce Deal and Peter N. Hess},
  journal={Banking \& Insurance},
The catastrophic terrorist attack of September 11, 2001 caused unprecedented insured losses. While the insurance industry covered these losses, it also took swift steps to limit its exposure to such risks in the future. In response to ensuing market dislocations, the Terrorism Risk Insurance Act (TRIA) was passed in 2002. The law temporarily requires primary insurers to offer terrorism coverage and creates a federal "backstop" to limit losses on such coverage. In anticipation of the program's… Expand
Trends in Terrorism: Threats to the United States and the Future of the Terrorism Risk Insurance Act
Abstract : The Terrorism Risk Insurance Act of 2002 (TRIA) was crafted in the aftermath of the 9/11 attacks after the insurance industry, stung by $32 billion in damage claims (by current estimates)Expand
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The terrorist attacks of September 11, 2001, inflicted enormous losses on the insurance industry and businesses. In the wake of the disruptions occurring in the insurance market at the time, theExpand
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This paper evaluates the need for a government role in insuring natural and man-made catastrophes in the United States. Although insurance markets have been stressed by major natural catastrophes,Expand
The Federal Role in Terrorism Insurance: Evaluating Alternatives in an Uncertain World
What are the Terrorism Risk Insurance Act's effects on the market for terrorism insurance? What would be the effect of enhancing provisions for nuclear, biological, chemical, and radiological (NBCR)Expand
Distribution of Losses from Large Terrorist Attacks Under the Terrorism Risk Insurance Act
as indicated in a notice appearing later in this work. This electronic representation of RAND intellectual property is provided for noncommercial use only. Permission is required from RAND toExpand
The Post-Crisis CMBS Market: Will Regulations Prevent Another Market Meltdown?
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Terrorism Insurance in the Post September 11 Marketplace [Updated December 7, 2001]
The insured losses from the terrorist attacks of September 11 are currently estimated to total as much as $70 billion, the largest insured catastrophic loss in history. Although the insuranceExpand
War and Terrorism Insurance: Plans for Long-term International Stability and Affordability
The horrors of 11 September 2001 are not confined to human tragedies. The impact on thewideworld of insurance and reinsurance is on a scale comparablewith the ongoingwar on terrorism. Insurers in theExpand
Quantitative Terrorism Risk Assessment
Traditionally, terrorism risk has been priced based exclusively on the relationship between supply and demand in the insurance market, with no basis in actuarial principles. This article discussesExpand
The role of insurance in managing extreme events: implications for terrorism coverage.
  • H. Kunreuther
  • Economics, Medicine
  • Risk analysis : an official publication of the Society for Risk Analysis
  • 2002
It is argued that today there is a more important role for the public sector to play than ever before because of the uncertainties of the risks and the externalities associated with them. Expand
Dealing with Extreme Events: New Challenges for Terrorism Risk Coverage
The terrorist attacks on September 11, 2001 (9/11) against the United States revealed that the nature of international terrorism had changed. These attacks raised the fundamental question as to whatExpand
Terrorism and Insurance Markets: A Role for the Government as Insurer?
Since September 11, 2001, insurance markets have been struggling to adjust to new information about the magnitude of risks posed by terrorism, and to the loss of tens of billions of dollars inExpand
Advanced Techniques for Modeling Terrorism Risk
The attack of September 11, 2001, demonstrated that terrorism is capable of inflicting damage and loss of life with a severity that is many multiples of the most extreme U.S. natural perils. ThisExpand
Catastrophic Events, Parameter Uncertainty and the Breakdown of Implicit Long-Term Contracting: The Case of Terrorism Insurance
This paper examines the reaction of the stock prices of U.S. property-casualty insurers to the World Trade Center (WTC) terrorist attack of September 11, 2001. Theories of insurance marketExpand
Can insurers pay for the "big one"? Measuring the capacity of the insurance market to respond to catastrophic losses
This paper presents a theoretical and empirical analysis of the capacity of the U.S. property-liability insurance industry to finance major catastrophic property losses. The topic is importantExpand
Extreme Events and the Market for Terrorist Insurance
Institute of University of I ' ~ Business and S California at . I Economic Research Berkeley FISHER CENTER FOR REAL ESTATE AND URBAN ECONOMICS WORKING PAPER SERIES WORKING PAPER NO. 02-282 EXTREMEExpand