Press release

Best’s Commentary: Despite Uncertainty of TRIPRA Extension, AM Best Deems Rated Insurers’ Mitigation Plans Sufficient

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AM Best has reviewed the terrorism risk mitigation plans of rated insurers deemed to be reliant on the U.S. federal terrorism insurance backstop, and has determined that rating actions on these companies is not necessary at this time.

Earlier in 2019, AM Best announced that it would be requesting detailed mitigation plans from rated insurers identified as having material terrorism exposure and a significant reliance on TRIPRA (Terrorism Risk Insurance Program Reauthorization Act), in the event TRIPRA is not renewed. AM Best identified approximately 30 insurers that were found to have substantial terrorism exposure and a heavy reliance on TRIPRA for a large conventional weapon-type attack.

As detailed in a new Best’s Commentary, “Terrorism Risk Mitigation Plans Not Expected to Affect Ratings,” there were a number of instances when the quality of data being used by companies was in question. This resulted in the need for companies to revise and remodel the loss data using more refined exposure information. In each of these cases, the revised and remodeled loss data proved to be substantially lower and more in line with capital and expected risk appetites. For the remainder of the companies involved, AM Best viewed the quality of the data as sufficient. All of the companies were found to be acting in accordance with appropriate risk management practices.

Although the benefits of TRIPRA are far less than what they were when the program began in 2002 in the aftermath of Sept. 11, many insurers still use this federal backstop to lessen the financial impact should a terrorism event occur. TRIPRA is due to lapse at year-end 2020. Although AM Best is not taking any rating actions as part of this terrorism exposure review, it will be following up with those insurers in 2020 to confirm the execution of those mitigation plans.

To access the full copy of this commentary, please visit

A video discussion on the commentary with Edward Zonenberg, senior financial analyst, is available at

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