The property and casualty insurance industry is in the business of assuming and managing the risk of catastrophic losses. This industry routinely pays hundreds of billions of dollars in property, workers compensation, and liability losses resulting from hurricanes, earthquakes, tornadoes, winter storms, industrial accidents, and other mass loss events. Indeed, according to data published by the Insurance Information Institute, on average each year from 2004–2013 US property insurers responded to twenty-eight catastrophic events producing three million claims with annual losses of $26 billion (in 2013 dollars).
The insurance industry’s experience with terrorism is far more limited. As a result, many of the tools and techniques that insurers have built to successfully manage other catastrophic loss events are not available to assist them in managing the risk of a terrorist attack.
1.5 – How TRIA Works