November 22, 2002—By requiring insurers to enter the business of providing terrorism coverage, the newly passed Terrorism Risk Insurance Act of 2002 compels insurers to determine appropriate pricing, says Risk Management Solutions (RMS), a provider of services for catastrophe risk management.
RMS is working with a number of insurers to quantify terrorism risk for both property and workers compensation lines of business nationwide in support of planned rate filings. The company’s US Terrorism Risk model, released in September, allows insurers to respond rapidly to the urgency surrounding terrorism risk pricing and underwriting practices.
The US Terrorism Risk model gives insurers the ability to quantify risk from terrorist attacks using a full probabilistic model of event frequency and severity. The model can identify the risk associated with a portfolio of business or individual policies, as well as generate terrorism loss costs at any level of geographic resolution, down to ZIP Code or even finer levels.
“Successful pricing, now at the forefront of insurer concerns, requires modeling based on sound methodology and expert opinion,” says Hemant Shah, president and CEO of RMS. “Our model is based on the most authoritative view of how terrorists actually choose targets and plan attacks, provided by experts in terrorism, weapons systems, and security from the US and around the world.”
For more information, contact RMS.
See also, “Senate overwhelmingly passes terrorism insurance bill” on FMLink.
