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Table of Contents

I. INTRODUCTION AND EXECUTIVE SUMMARY...................................................... 1

II. BACKGROUND.............................................................................................................. 3

III.TRIP OVERVIEW.......................................................................................................... 5

IV. DATA COLLECTION .................................................................................................... 9

A. Data Collection Process................................................................................................ 9

B. Responding Insurer Categories................................................................................... 10

C. Response Rate............................................................................................................ 12

D. Data Quality Evaluation ............................................................................................. 13

V. ANALYSIS OF THE OVERALL EFFECTIVENESS OF THE PROGRAM .............. 15

A. General Program Observations................................................................................... 15

B. Availability of Terrorism Risk Insurance..................................................................... 17

C. Affordability of Terrorism Risk Insurance................................................................... 19

1. Embedded Terrorism Risk Insurance..................................................................... 19

2. Standalone Terrorism Risk Insurance.................................................................... 26

D. Take-Up Rates for Terrorism Risk Insurance............................................................... 28

E. Availability and Affordability of Terrorism Risk Insurance for Places of Worship........ 39

F. Private Reinsurance Availability................................................................................. 42

G. Projections from Modeled Loss Questions................................................................... 50

H. Terrorism Risk Insurance for NBCR Losses................................................................ 54

I. Terrorism Risk Insurance for Cyber Losses................................................................. 58

1. Cyber Insurance Coverage.................................................................................... 59

2. Cyber Insurance Market and Ransomware............................................................. 62

3. Analysis of Data Call Information......................................................................... 65

4. Application of TRIP to Cyber Terrorism Losses.................................................... 73

VI. ADDITIONAL ANALYSIS ON INSURER CATEGORIES......................................... 75

A. Small Insurers............................................................................................................ 75

B. Captive Insurers......................................................................................................... 76

C. Alien Surplus Lines Insurers....................................................................................... 83

VII. WORKERS’ COMPENSATION .............................................................................. 86

VIII. TERRORISM RISK PREMIUMS EARNED OVER TIME................................. 90

A. Non-Small and Small Insurers.................................................................................... 90

B. Alien Surplus Lines Insurers....................................................................................... 90
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C. Captive Insurers......................................................................................................... 91

D. Aggregate Industry Totals........................................................................................... 91

IX. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS............................ 92

A. Background................................................................................................................ 92

B. Responses to ACRSM Report Recommendations........................................................ 92

X. CONCLUSION.............................................................................................................. 94

APPENDIX 1: 2021 TAKE-UP RATES BY STATE.......................................................... 95

APPENDIX 2: 2021 TAKE-UP RATES BY STATE AND LINE GROUPS...................... 97
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Glossary

2015 Reauthorization 

Act

.......... Terrorism Risk Insurance Reauthorization Act of 

2015, Pub. L. 114-1, 129 Stat. 3

2019 Reauthorization 

Act

.......... Terrorism Risk Insurance Program Reauthorization 

Act of 2019, Pub. L. 116-94, 133 Stat. 2534

2020 Effectiveness 

Report

.......... FIO, Report on the Overall Effectiveness of the 

Terrorism Risk Insurance Program (2020)

2020-2022 TRIP data 

calls

.......... TRIP data calls performed in 2020, 2021, and 2022 

(collecting data for the years 2019, 2020, and 2021, 

respectively)

ACRSM .......... Advisory Committee on Risk-Sharing Mechanisms

ACRSM Report .......... Report of the Advisory Committee on Risk-Sharing 

Mechanisms (2020)

Act of Terrorism .......... Under TRIA, an act certified as terrorism by the 

Secretary, in consultation with the Attorney General 

and the Secretary of Homeland Security

Alien Surplus Lines 

Insurer

.......... Non-U.S. insurer that is an eligible surplus lines 

insurer as listed on the NAIC’s Quarterly Listing of 

Alien Surplus Lines Insurers

Captive Insurer .......... Insurer formed to insure the risk exposures of its 

policyholder owner(s) and regulated by the captive 

insurance laws of a particular state jurisdiction

CMP .......... Commercial Multi-Peril

Co-Pay Share .......... Under TRIP, the percentage of losses that an insurer 

is obligated to pay after meeting its deductible and 

the Program Trigger is satisfied. The federal 

government is responsible for the remaining 

percentage of losses above the insurer’s deductible

(i.e., the Federal Share of Compensation). The copay share for 2021 was 20 percent.

DEP .......... Direct earned premiums

Embedded Terrorism 

Insurance

.......... Terrorism insurance provided within a P&C policy 

that also covers other risks

Federal Share of 

Compensation

.......... Under TRIP, the percentage of an insurer’s losses 

that the federal government will pay after the insurer 

meets its deductible and the Program Trigger is 

satisfied. The insurer is responsible for the 

remaining percentage of losses above its deductible

(i.e., the Co-Pay Share). The federal share of 

compensation for 2021 was 80 percent.
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FIO .......... Federal Insurance Office

GAO .......... U.S. Government Accountability Office

IMARA .......... Insurance Marketplace Aggregate Retention Amount

Insurer Deductible .......... Under TRIP, the amount an individual insurer must 

pay before receiving the federal share of 

compensation, after an event is certified as an act of 

terrorism and the Program Trigger is exceeded. An 

insurer’s deductible is 20 percent of its TRIPeligible DEP in the prior year.

NAIC .......... National Association of Insurance Commissioners

NBCR .......... Nuclear, biological, chemical, or radiological

Non-Small Insurer .......... Domestic insurers or groups above the small insurer 

threshold

P&C .......... Property and casualty

PML .......... Probable maximum loss

Program .......... Terrorism Risk Insurance Program (also, TRIP)

Program Cap .......... Maximum aggregate exposure limit for the federal 

government and insurers under TRIP in any calendar 

year. The program cap for 2021 was $100 billion. 

Program Trigger .......... Minimum amount of insurance industry aggregate 

insured losses resulting from certified act(s) of 

terrorism that must occur in a calendar year before 

any federal payments can be made under TRIP. The 

program trigger for 2021 was $200 million.

PWG .......... President’s Working Group on Financial Markets

Report .......... FIO, Report on the Overall Effectiveness of the 

Terrorism Risk Insurance Program (June 2022)

Standalone Policy .......... Insurance policy which provides coverage only for 

terrorism risk

Secretary .......... Secretary of the Treasury

September 11 Attacks .......... Terrorist attacks occurring on September 11, 2001

Small Insurer .......... An insurer as defined under 31 C.F.R. § 50.4(z)

Take-Up Rate .......... Extent to which terrorism risk insurance is 

purchased by policyholders

Treasury .......... U.S. Department of the Treasury

TRIA .......... Terrorism Risk Insurance Act of 2002, as amended

TRIP .......... Terrorism Risk Insurance Program (also, Program)

TRIP-Eligible DEP .......... DEP earned within the TRIP-eligible lines of 

insurance
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TRIP-Eligible Lines 

of Insurance

.......... Commercial P&C insurance subject to TRIP 

pursuant to 31 C.F.R. § 50.4(w)
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I. INTRODUCTION AND EXECUTIVE SUMMARY

Under the Terrorism Risk Insurance Act of 2002, as amended (TRIA),

1

the Secretary of the 

Treasury (Secretary) is required to submit a report regarding the Terrorism Risk Insurance 

Program (TRIP or Program) to the Committee on Financial Services of the House of 

Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate.2 

The Federal Insurance Office (FIO) of the U.S. Department of the Treasury (Treasury) assists the 

Secretary in the administration of TRIP.3 FIO has prepared this Report which, as required by 

TRIA, must be submitted no later than June 30, 2022, and must include: 

(1) “an analysis of the overall effectiveness of the Program;”

(2) “an evaluation of the availability and affordability of terrorism risk insurance, which shall 

include an analysis of such availability and affordability specifically for places of 

worship;”

(3) “an evaluation of any changes or trends in the data collected” by the Secretary;

(4) “an evaluation of whether any aspects of the Program have the effect of discouraging or 

impeding insurers from providing commercial property casualty insurance coverage or 

coverage for acts of terrorism;”

(5) “an evaluation of the impact of the Program on workers’ compensation insurers;” and

(6) “an updated estimate of the total amount” of terrorism risk insurance premiums “earned 

since January 1, 2003.”

4

TRIA also requires the Secretary to collect data related to the Program on an annual basis. 5 

Since the 2015 Reauthorization Act, FIO has conducted five data calls—a voluntary data call in 

2016 seeking calendar year 2015 data, and six mandatory data calls in 2017, 2018, 2019, 2020, 

2021, and 2022 requiring, respectively, the production of 2016, 2017, 2018, 2019, 2020, and 

1 Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 116 Stat. 2322 (2002), as amended. The provisions of 

TRIA appear in a note of the United States Code (15 U.S.C. § 6701 note) and, therefore, references to the provisions 

of TRIA are identified by the sections of the law (e.g., “TRIA § 102(1) (definition of an “act of terrorism”)”).

2 Beginning in 2016, the Secretary has been required to submit a report to the Committee of Financial Services of 

the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate no later 

than June 30, 2016, and every other June 30 thereafter through the Program’s expiration date. Treasury published its 

first Program Effectiveness Report on June 30, 2016. See FIO, Report on the Overall Effectiveness of the Terrorism 

Risk Insurance Program (2016), 

https://home.treasury.gov/system/files/311/2016_TRIP_Effectiveness_%20Report_FINAL.pdf. Treasury published 

the second Effectiveness Report in June 2018. See FIO, Report on the Overall Effectiveness of the Terrorism Risk 

Insurance Program (2018), https://home.treasury.gov/system/files/311/2018_TRIP_Effectiveness_Report.pdf (2018 

Effectiveness Report). Treasury published the third Effectiveness Report in June 2020. See FIO, Report on the 

Overall Effectiveness of the Terrorism Risk Insurance Program (2020), 

https://home.treasury.gov/system/files/311/2020-TRIP-Effectiveness-Report.pdf(2020 Effectiveness Report). This 

Report is the fourth Effectiveness Report published by Treasury.

3 Federal Insurance Office Act of 2010, 31 U.S.C. § 313(c)(1).

4 TRIA § 104(h)(2).

5 TRIA § 104(h)(1). This requirement was instituted in the Terrorism Risk Insurance Reauthorization Act of 2015, 

Pub. L. 114-1, 129 Stat. 3 (2015 Reauthorization Act).
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2021 calendar year data. This report (Report) addresses the six statutory considerations 

identified above and uses the 2020 through 2022 TRIP data calls (2020-2022 TRIP data calls) to 

comply with the requirements of TRIA.

Based on analysis of the collected information and the identified issues, Treasury has reached the 

following conclusions:

(1) The Program generally has been effective in achieving the goals identified by TRIA. 

Refer to Sections V, VI, and VII.

(2) Terrorism risk insurance has generally been available and affordable over the past three

years. The reported information reflects that places of worship take up terrorism risk 

insurance at a higher percentage than do businesses in other industry segments, although 

for a higher percentage amount of the total policy premium. Refer to Section V.E.

(3) The market for terrorism risk insurance has been relatively stable over the last three 

years, with few observable differences in relevant benchmarks, such as price and take-up 

rate. Refer to Sections V, VI, and VII.

(4) Treasury has not observed any aspects of the Program (either based upon the collected 

data or operation of the Program generally) that have had the effect of discouraging or 

impeding insurers from providing commercial property and casualty (P&C) insurance in 

general, or coverage for acts of terrorism specifically. Refer to Sections V, VI, and VII.

(5) Changes in the market for cyber insurance have presented both insurers and policyholders 

with challenging issues, which continue to evolve. Application of the Program to 

potential claims of cyber terrorism under cyber policies written in TRIP-eligible lines of 

insurance requires a complicated analysis based upon existing statutory and regulatory 

requirements, the nature of cyber risk, and market conditions. Through its administration 

of TRIP, FIO will continue to evaluate and analyze the application of TRIP to future 

cyber-related losses. Refer to Section V.I.

(6) The Program continues to serve as an important backstop to workers’ compensation 

insurance given that, under state law, workers’ compensation insurance must cover 

terrorism risk, is not subject to limits of liability, and cannot exclude causes of loss 

posing extreme aggregation risks. Refer to Section V and VII.

(7) Treasury’s estimate of total direct earned premiums for terrorism risk insurance from 

2003 through 2021 is approximately $49.7 billion (excepting captive insurers), which is 

between one and two percent of the total premiums earned in the TRIP-eligible lines of 

insurance during that period. Refer to Section VIII.

This Report also addresses actions taken to date by Treasury in response to the recommendations 

of the Advisory Committee on Risk-Sharing Mechanisms (ACRSM). Refer to Section IX.
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II. BACKGROUND

Prior to September 11, 2001, commercial P&C insurance policies generally did not exclude 

coverage for losses resulting from terrorism. The events of September 11, 2001 (September 11 

attacks) resulted in approximately $50 billion of insurance losses, about two-thirds of which 

were reimbursed by reinsurers to insurers.6 Following the September 11 attacks, insurers and 

reinsurers began to exclude coverage for terrorism risk from commercial P&C policies.

TRIA was enacted in 2002, in part, because the widespread unavailability of terrorism risk 

insurance “could seriously hamper ongoing and planned construction, property acquisition, and 

other business projects, generate a dramatic increase in rents, and otherwise suppress economic 

activity.”7 TRIA established TRIP, which requires insurers to make terrorism risk coverage 

available within certain lines of commercial P&C insurance (TRIP-eligible lines of insurance).8 

To assist insurers with the resulting potential financial exposure, certain insurance losses are 

eligible for reimbursement through the Program if they result from an “act of terrorism” as 

defined by TRIA and certified by the Secretary.9 The Program is housed in Treasury and 

administered by the Secretary with the assistance of FIO.10

TRIA originally authorized the Program for a three-year period ending December 31, 2005. 

Congress has since reauthorized TRIP four times,11 most recently in the Terrorism Risk 

Insurance Program Reauthorization Act of 2019 (2019 Reauthorization Act), which extended the 

Program through December 31, 2027. Changes enacted in Program reauthorizations, coupled 

with increases in the insurance industry premium base over time, have generally reduced 

potential federal exposure to insured losses and increased private market exposure.

6

Insured losses shown in inflation-adjusted 2021 dollars. See Insurance Information Institute, Background on: 

Terrorism Risk and Insurance(2021), https://www.iii.org/article/background-on-terrorism-risk-and-insurance.

7 TRIA § 101(a)(5).

8

See TRIA § 103(c). Treasury has implemented regulations defining the “TRIP-eligible lines of insurance” with 

reference to certain lines identified for state regulatory purposes as follows: Fire, Allied Lines, Commercial 

Multiple Peril (non-liability), Commercial Multiple Peril (liability), Ocean Marine, Inland Marine, Workers’ 

Compensation, Other Liability (but not including Professional Liability, which is otherwise within this line for state 

reporting purposes), Products Liability, Aircraft, and Boiler and Machinery. Definitions, 31 C.F.R. § 50.4(w)(1) 

(2021). The regulations and Treasury guidance also confirm that cyber insurance, including stand-alone cyber 

liability policies, are subject to TRIP, so long as they are written in the TRIP-eligible lines of insurance. Id.; see

also Guidance Concerning Stand-Alone Cyber Liability Insurance Policies Under the Terrorism Risk Insurance 

Program, 81 Fed. Reg. 95312 (December 27, 2016). Some of the TRIP-eligible lines of insurance also include

personal P&C premium exposures that are not subject to the Program. There are also certain other defined 

exclusions within these lines. See Definitions, 31 C.F.R. § 50.4(w)(2) (2021).

9 Further details concerning the operation of the Program are provided in Section III of this Report.

10 Federal Insurance Office Act of 2010, 31 U.S.C. § 313(c)(1)(D) (2012).

11 See Terrorism Risk Insurance Extension Act of 2005, Pub. L. 109-144, 119 Stat. 2660 (2005); Terrorism Risk 

Insurance Program Reauthorization Act of 2007, Pub. L. 110-160, 121 Stat. 1839 (2007); Terrorism Risk Insurance 

Reauthorization Act of 2015, Pub. L. 114-1, 129 Stat. 3 (2015); Terrorism Risk Insurance Program Reauthorization 

Act of 2019, Pub. L. 116-94, 133 Stat. 2534 (2019).
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TRIA provides that the Secretary shall annually require participating insurers to provide 

information and data for the Secretary to analyze the overall effectiveness of the Program. 12 The 

information to be provided to the Secretary by participating insurers includes information

regarding:

(1) lines of insurance with exposure to terrorism losses;

(2) premiums earned on coverage offered for terrorism losses;

(3) geographical location of exposures;

(4) pricing of terrorism risk coverage offered;

(5) the take-up rate for terrorism risk coverage; 

(6) the amount of private reinsurance for acts of terrorism purchased; and 

(7) such other matters as the Secretary considers appropriate.13

The 2020-2022 TRIP data calls are discussed in Section IV.

12 TRIA § 104(h)(1).

13 TRIA §§ 104(h)(1)(A)-(G).
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III. TRIP OVERVIEW

The Program requires that each entity meeting the definition of an insurer make available 

coverage for insured losses resulting from acts of terrorism.14 The mandatory offer required 

from participating insurers must “not differ materially from the terms, amounts, and other 

coverage limitations applicable to losses arising from events other than acts of terrorism.” 15 The 

“make available” requirement applies only to TRIP-eligible lines of insurance.16 TRIA does not 

mandate that insurers offer terrorism risk insurance at a particular price,17 nor does TRIA require 

any policyholder to purchase insurance for terrorism risk.18 All commercial P&C insurers 

writing in TRIP-eligible lines and required to make terrorism risk insurance available under their 

policies are considered Program participants, regardless of whether their policyholders accept the 

offer to take up the coverage.

Insurers are eligible for federal payments under the Program only for losses resulting from “acts 

of terrorism.” An act of terrorism is defined under TRIA as an act certified by the Secretary in 

consultation with the Attorney General of the United States and the Secretary of Homeland 

Security:

• to be an act of terrorism;

• to be a violent act or an act that is dangerous to human life, property, or infrastructure; 

• to have resulted in damage within the United States;19 and

• to have been committed by an individual or individuals, as part of an effort to coerce the 

civilian population of the United States or to influence the policy or affect the conduct of 

the U.S. government by coercion.20

14 TRIA § 103(c). An insurer is defined under TRIA as any entity, including any affiliate thereof, which receives 

direct earned premiumsfor TRIP-eligible lines of insurance and is licensed or admitted to engage in the business of 

insurance in any state; an eligible surplus lines carrier; a federally-approved maritime, energy, or aircraft insurer; a 

state residual market insurance entity or workers’ compensation fund; or, to the extent provided in rules issued by 

the Secretary, a captive insurer or a self-insurance arrangement. TRIA § 102(6).

15 TRIA §103(c)(2).

16 Reinsurance is excluded from the TRIP-eligible lines of insurance. TRIA § 102(11)(B)(vii). The availability of 

private reinsurance for terrorism risk is discussed further in Section V.F.

17 State insurance rating laws and regulations may affect the price that can be charged by insurers writing terrorism 

risk insurance subject to TRIA.

18 In some circumstances, state law may require the purchase of (or limit the ability to exclude) coverage for 

terrorism risk, such as in the case of workers’ compensation insurance, discussed further in Section VII.

19 TRIA also provides that an act of terrorism may involve damage outside the United States in the case of certain air 

carriers or vessels, or on the premises of a U.S. mission. TRIA § 102(1)(A)(iii).

20 TRIA § 102(1)(A).
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Additionally, the Secretary may not certify an act that results in P&C insurance losses totaling 

less than $5 million,21 or that was committed as part of the course of a war declared by 

Congress.22

If the Secretary certifies an act of terrorism, participating insurers may submit claims to 

Treasury, and Treasury will determine whether, and in what amounts, insurers are eligible for 

payments under the Program.23 Treasury is then required to obtain reimbursement of certain 

payments of the federal share of compensation through a recoupment process and may obtain 

reimbursement of additional payments depending on the amount of total losses.

Payment to a participating insurer under the Program is based on a number of factors described 

below, including the insurer’s individual deductible, the Program Trigger, the federal share of 

compensation of an insurer’s losses, and the Program Cap. As described further below, Treasury 

may use a recoupment process to recover amounts expended; the applicable process will vary 

depending upon the Insurance Marketplace Aggregate Retention Amount (IMARA).

Insurer Deductible

After the Secretary certifies one or more acts of terrorism, two prerequisites must be met before 

an insurer is eligible for payments from Treasury under the Program: (1) the insurer’s “insured 

losses” subject to the Program24 must exceed its deductible (which is 20 percent of the insurer’s 

direct earned premiums (DEP) in the TRIP-eligible lines for the prior calendar year),

25 and (2) 

the Program Trigger must be satisfied.

Program Trigger

The Program Trigger is the minimum amount of insurance industry aggregate insured losses 

resulting from a certified act (or acts) of terrorism taking place in a particular calendar year that 

must be sustained before any federal payments are made. The Program Trigger was $200 

21 TRIA § 102(1)(B)(ii). As Treasury confirmed in a clarification to the TRIP rules in 2021, P&C insurance losses 

for certification purposesinclude amounts that would be payable under P&C insurance policy obligations, such as 

on account of exclusions or deductibles, becausethe certification analysis looks to the size of the event in question. 

See 31 C.F.R. § 50.4(b)(2)(ii)(2021). See alsoTerrorism Risk Insurance Program; Updated Regulations in Light of 

the Terrorism Risk Insurance Program Reauthorization Act of 2019, and for Other Purposes, 86 Fed. Reg. 30537 

(June 9, 2021)(2021 Updated Regulations); Terrorism Risk Insurance Program; Updated Regulations in Light of the 

Terrorism Risk Insurance Program Reauthorization Act of 2019, and for Other Purposes; Correction, 86 Fed. Reg. 

31620 (June 15, 2021)(2021 Updated Regulations Correction).

22 This limiting clause regarding an act of war does not apply to coverage under the Program for workers’ 

compensation insurance. TRIA § 102(1)(B)(i).

23 Any determination by Treasury is made pursuant to the Program regulations. See Terrorism Risk Insurance 

Program, 31 C.F.R. Part 50 (2021).

24 In 2021, Treasury issued a final rule clarifying that “insured losses” for purposes of TRIP exclude any amounts 

for which the policyholder is responsible (whether on account of policy exclusions, deductibles, or retention 

amounts). The final rule also addresses the calculation of the Program Trigger, the recovery of the Federal Share 

under TRIP, and the calculation of the Program Cap. 31 C.F.R. § 50.4(n)(3)(iv)(2021). See also 2021 Updated 

Regulations, 86 Fed. Reg. 30537; 2021Updated Regulations Correction, 86 Fed. Reg. 31620.

25 TRIA § 102(7).
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million in calendar year 2021 and will remain at $200 million each year through the expiration of 

the Program in 2027.26 Once the Program Trigger has been satisfied, Treasury will make 

payments to individual insurers for the federal share of compensation above their respective 

deductibles.

Federal Share of Compensation

After an insurer meets its deductible and the Program Trigger is satisfied, the federal government 

will pay a certain percentage of that insurer’s losses in excess of the insurer’s deductible. For 

calendar year 2021, the federal share of compensation was 80 percent of an insurer’s losses 

above its deductible; this sharing ratio will remain at this level until the Program expires in 

2027.27

Program Cap

TRIA limits the aggregate exposure of both insurers and the federal government arising from 

insured losses for an act or acts of terrorism. Specifically, TRIA prohibits the Secretary from 

making payments for any portion of aggregate insured losses (counting amounts paid by 

Program participants and the federal government) from acts of terrorism that exceed the Program 

Cap of $100 billion during any calendar year.28 If the Program Cap is reached, an insurer that 

has met its insurer deductible by making payments for insured losses subject to the Program is 

not liable for any portion of losses that exceeds the Program Cap.29

Recoupment

The Secretary will collect “terrorism loss risk-spreading premiums” from insurers if federal 

payments are made to insurers. Under this mechanism, known as recoupment, Program 

participants may be required to collect funds from policyholders by placing a surcharge on 

insurance policies written in TRIP-eligible lines. The surcharges will be set based upon the 

amount that must be recovered by Treasury and the time within which it must be recovered, as 

required by TRIA. Insurers must then remit these surcharges to the Secretary.30 The 

requirement to collect, or recoup, terrorism loss risk-spreading premiums applies not only to 

insurers that received federal payments under the Program, but also to all insurers writing 

26 TRIA § 103(e)(1)(B). TRIP did not originally have a Program Trigger. This requirement was introduced in the 

Terrorism Risk Insurance Extension Act of 2005, Pub. L. 109-144, 119 Stat. 2660. It was initially set at $50 million 

(for losses occurring in 2006), and it increased to $100 million for losses occurring in 2007. When TRIP was 

reauthorized through 2014, no change was made to the Program Trigger, which remained at $100 million. 

Terrorism Risk Insurance Program Reauthorization Act of 2007, Pub. L. 110-160, 121 Stat. 183. The 2015 

Reauthorization Act, however, provided for an annual increase in the Program Trigger of $20 million beginning in 

2016, until reaching $200 million in 2020. Under the 2019 Reauthorization Act, the Program Trigger remains at 

$200 million until the current expiration of the Program.

27 TRIA § 103(e)(1)(A).

28 TRIA § 103(e)(2)(A).

29 TRIA requires the Secretary to notify Congress if insured losses are projected to exceed the Program Cap and in 

that case the Secretaryshall determine the pro rata share of insured losses to be paid by each affected insurer. TRIA 

§§ 103(e)(2)-(3).

30 TRIA §§ 103(e)(7)-(8).
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policies in TRIP-eligible lines of insurance. Surcharges are placed on all TRIP-eligible 

insurance policies regardless of whether the policyholder purchased terrorism risk insurance.31

IMARA

TRIA provides that recoupment under the Program may be mandatory or subject to the 

Secretary’s discretion. This determination depends on how any federal payments under TRIP 

compare with the total insured losses paid by participating insurers. Mandatory recoupment 

occurs where total industry payments are below the IMARA. The IMARA, which is calculated 

annually by Treasury based upon its annual TRIP data calls, is the annual aggregate average of 

insurer deductibles over the prior three-year period.32 For purposes of calendar year 2022, the 

IMARA is $42.7 billion.33 In connection with amounts subject to mandatory recoupment, 

Treasury must collect 140 percent of total amounts expended.34

31 TRIA § 103(e)(8).

32 See 31 C.F.R. § 50.4(m)(2) (2021).

33 See IMARA Calculation for Calendar Year 2022 under the Terrorism Risk Insurance Program, 86Fed. Reg. 

73100(December 23, 2021).

34 See TRIA §§ 103(e)(7)-(8).
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IV. DATA COLLECTION

Treasury used the data from the 2020-2022 TRIP data calls as one of the main bases upon which 

to draw conclusions respecting the effectiveness of the Program. This section explains the FIO 

data collection process, the categories of insurers who responded to the data call, and how FIO 

evaluated the quality of the data.

A. Data Collection Process

This Report is based primarily on the results of Treasury’s 2020-2022 TRIP data calls and FIO’s 

administration of the Program. In addition, Treasury performed qualitative research and sought 

input from stakeholders, including insurers, state insurance regulators, the National Association 

of Insurance Commissioners (NAIC), policyholders, and the general public, through a Federal 

Register Notice seeking comments.35 Treasury also reviewed publicly available data reported by 

insurers to state regulators.

The 2020-2022 TRIP data calls were mandatory for participating insurers, subject to an

exception for small insurers that wrote less than $10 million in TRIP-eligible lines premiums in 

each reporting year.36

Treasury collected data on a group basis (combining affiliated companies) because TRIP is 

generally administered on a group basis.37 The information collected included data concerning 

premiums, policy exposures, policyholder take-up rates, and reinsurance.38 Treasury collected 

information from four insurer categories(described further below in Section IV.B): (1) alien 

35 See 2022 Report on the Effectiveness of the Terrorism Risk Insurance Program, 87 Fed. Reg. 18473 (March 30, 

2022). Treasury received 18responsive comments addressing the Program, from:Centers for Better Insurance LLC 

(April 20, 2022) (addressing NBCR Risks) (CBI NBCR Comments); Centers for Better Insurance LLC (May 2, 

2022) (addressing Program Administration) (CBI Program Administration Comments); Centers for Better Insurance 

LLC (May 3, 2022) (addressing Cyber Risks) (CBI Cyber Comments); National Association of Mutual Insurance 

Companies (May 11, 2022) (NAMIC Comments); Vermont Captive Insurance Association (May 13, 2022) (VCIA 

Comments); Marsh McLennan (May 15, 2022) (Marsh Comments); AM Best Rating Services (May 16, 2022) (AM 

Best Comments); American Academy of Actuaries (May 16, 2022) (AAA Comments); American Property Casualty 

Insurance Association (May 16, 2022) (APCIA Comments); Coalition to Insure Against Terrorism (May 16, 2022) 

(CIAT Comments); FM Global (May 16, 2022) (FM Global Comments); Reinsurance Association of America (May 

16, 2022) (RAA Comments); Self-Insurance Institute of America, Inc. (May 16, 2022)(SIIA Comments); National 

Council on Compensation Insurance (May 16, 2022) (NCCI Comments); Underwriters at Lloyd’s, London (May 16, 

2022) (Lloyd’s Comments); United Airlines, Inc. (May 16, 2022) (United Comments); RMS (May 17, 2022) (RMS 

Comments); and MITRE Corporation (May 27, 2022) (MITRE Comments). All comments are available at 

https://www.regulations.gov/docket/TREAS-TRIP-2022-0010/comments.

36 Treasury estimates that insurers eligible for this reporting exception (between 350 to 400 insurers, depending upon 

the year) represent annually about 0.4 percent of the TRIP-eligible lines premium market for each TRIP data call 

between 2020and 2022. See, e.g., S&P Global Market Intelligence (as of April 13, 2022).

37 An “affiliate” under TRIP is “any entity that controls, is controlled by, or is under common control with the 

insurer.” Definitions, 31 C.F.R. § 50.4(c) (2021). Calculation of the deductible and the submission of claims under 

TRIP is on a group basis, in light of the “affiliate” definition in the regulations. Recoupment surcharges, however,

are assessed and collected on an individual company basis. See Insurer Responsibility, 31 C.F.R. § 50.96 (2021). 

Insurer groups may include both domestic insurers and foreign insurers that write business in the United States only 

on a surplus lines basis.

38 See Annual Data Reporting, 31 C.F.R § 50.51(b) (2021).
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surplus lines insurers, (2) captive insurers, (3) non-small insurers (or larger licensed insurers 

above the small insurer threshold), and (4) small insurers.

39

 Each insurer category completes a 

different reporting template that is tailored to that category.

Treasury collected data through a third-party insurance statistical aggregator, as required by 

TRIA.

40

 The statistical aggregator provided results to Treasury in an aggregated, anonymous 

format that did not identify any individual reporting insurer. Treasury obtained most of the 

workers’ compensation insurance elements from the National Council on Compensation 

Insurance (providing data from the states in which it operates as well as on behalf of other 

independent state workers’ compensation rating bureaus), the California Workers’ Compensation 

Insurance Rating Bureau, and the New York Compensation Insurance Rating Board, thereby 

reducing the burden of the reporting requirements on the insurance industry.

State insurance regulators began annually collecting data relating to terrorism risk insurance in 

2016. The state insurance regulator data calls sought information similar to that collected by 

Treasury, although in some cases on a more detailed, granular basis. Given the similarity of the 

information sought by Treasury and state insurance regulators, and the burden caused to insurers 

by the existence of dual data calls on the same subject, beginning in 2018, Treasury and state 

insurance regulators developed a consolidated data call designed to satisfy each of their 

respective statutory mandates and objectives while permitting reporting insurers to submit, for 

the most part, the same information to both Treasury and state insurance regulators. 41 The 

consolidated collection approach significantly reduces burdens on insurers required to report 

information to both Treasury and state insurance regulators.

The 2022 TRIP data call added new reporting requirements for captive insurers, in particular, 

and for any insurer writing cyber insurance.

42

 Treasury discusses the information obtained from 

these new reporting requirements later in the Report.

B. Responding Insurer Categories

Insurer groups were required to report in one of four insurer categories, based on the 

requirements of TRIA and its implementing regulations. The categories include insurers that are 

“admitted” or licensed to write business in at least one U.S. jurisdiction,

43 and domestic and 

39 Smallinsurers are defined with reference to the size of the insurer’s policyholder surplus and TRIP-eligible DEP 

in the immediately preceding year as compared with an amount five times the size of the Program Trigger. See

Definitions, 31 C.F.R. § 50.4(z)(2021). See also FIO, Study of Small Insurer Competitiveness in the Terrorism Risk 

Insurance Marketplace(2019), 9-10,

https://home.treasury.gov/system/files/311/2019_TRIP_SmallInsurer_Report.pdf (2019 Small Insurer Study).

40 TRIA § 104(h)(3). The data aggregator for the 2020-2022 TRIP data calls was Insurance Services Office, Inc.

41 See FIO, 2018 Effectiveness Report, 10-11.

42 See Terrorism Risk Insurance Program 2022 Data Call, 86 Fed. Reg. 64600 (November 18, 2021); 2022 

Terrorism Risk Insurance Program Data Call, 87 Fed. Reg. 22026(April 13, 2022).

43 An admitted company is “an insurance company licensed to do business in a state(s), domiciled in an alternative 

state or country.” “Glossary of Insurance Terms,” NAIC, http://www.naic.org/consumer_glossary.htm.
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foreign insurers that have been permitted as a matter of state law to write U.S. business on a 

surplus lines basis.

44

In 2022, the four insurer categories required to report information were as f ollows:

(1) Alien Surplus Lines Insurers: Alien surplus lines insurers that are not affiliated with 

either a domestic non-small or small insurer. Alien surplus lines insurers are discussed in 

further detail in Section VI.C.

(2) Captive Insurers: Insurers formed to insure the risk exposures of their policyholder 

owners and regulated by the captive insurance laws of a particular state jurisdiction. 

Captive insurers are discussed in further detail in Section VI.B.

(3) Non-Small Insurers: Domestic insurers or groups (including affiliated alien surplus 

lines insurers) with either DEP in TRIP-eligible lines of insurance (TRIP-eligible DEP) 

above the small insurer threshold or a policyholder surplus above the small insurer 

threshold.

(4) Small Insurers: Domestic insurers or groups (including affiliated alien surplus lines 

insurers) with both 2020 DEP in TRIP-eligible lines of insurance of less than $1 billion

and a 2020 policyholder surplus of less than $1 billion (subject to the reporting exception 

for insurers with less than $10 million in TRIP-eligible DEP).

45

 Small insurers are 

discussed in further detail in Section VI.A.

Figure 1 shows insurer participation by category, as indicated by reported TRIP-eligible DEP.

Figure 1: TRIP-Eligible DEP by Insurer Category ($ billions)46

2020 TRIP data call 2021 TRIP data call 2022 TRIP data call

2019 TRIPEligible DEP% of 

Total

2020 TRIPEligible DEP% of 

Total

2021 TRIPEligible DEP% of 

Total

Alien Surplus Lines Insurers $ 11.1 5% $ 11.0 5% $ 12.1 5%

Captive Insurers 9.0 4% 10.5 5% 14.4 6%

Non-Small Insurers 173.0 80% 175.3 80% 185.5 78%

Small Insurers 22.9 11% 22.2 10% 26.2 11%

Total $ 216.1 100% $ 219.0 100% $ 238.2 100%

Source: 2020-2022 TRIP data calls

44 Non-admitted insurers can write insurance on a surplus lines basis when the desired coverage cannot be obtained 

from admitted insurers in the jurisdiction in question. See31 C.F.R. § 50.4(o)(1)(i)(B)(2021). See also “Glossary 

of Insurance Terms,” NAIC, http://www.naic.org/consumer_glossary.htm.

45 The small insurer threshold is calculated annually in relation to the Program Trigger amount (see, e.g., FIO, 2019 

Small Insurer Study, 9). The Program Trigger is now set at $200 million through the current expiration of the 

Program in 2027; therefore, the small insurer threshold will not change through 2027 absent any intervening 

legislative changesto the Program Trigger.

46 Some figures in the Report may not add to 100 percent due to rounding.
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Figure 2 illustrates the total amount of premiums in the TRIP-eligible lines of insurance reported 

by non-small and small insurers. For a breakdown of the terrorism risk insurance premium 

component of these premiums, see Figure 59 (Section VII).

Figure 2: TRIP-Eligible DEP by TRIP-Eligible Lines of Insurance 

(Non-Small and Small Insurers) ($ billions)

2020 TRIP data call 2021 TRIP data call 2022 TRIP data call

2019 TRIPEligible 

DEP

% of 

Total

2020 TRIPEligible 

DEP

% of 

Total

2021 TRIPEligible 

DEP

% of 

Total

Aircraft (all perils) $ 1.6 1% $ 1.7 1% $ 1.9 1%

Allied Lines 7.5 4% 8.4 4% 10.4 5%

Boiler and Machinery 1.6 1% 1.7 1% 2.0 1%

Commercial Multiple Peril (liability) 15.1 8% 14.9 8% 15.1 7%

Commercial Multiple Peril (nonliability) 26.9 14% 28.4 14% 31.4 15%

Excess Workers’Compensation 1.2 1% 1.2 1% 1.3 1%

Fire 9.8 5% 11.4 6% 13.4 6%

Inland Marine 13.0 7% 13.5 7% 10.8 5%

Ocean Marine 2.8 1% 2.9 1% 3.2 2%

Other Liability 47.7 24% 50.2 25% 58.7 28%

Products Liability 3.8 2% 3.8 2% 3.8 2%

Workers’ Compensation 64.8 33% 59.1 30% 59.6 28%

Total $ 195.9 100% $ 197.4 100% $ 211.7 100%

Source: 2020-2022 TRIP data calls

C. Response Rate

Treasury estimates that the response rate for domestic insurers in the 2022 TRIP data call 

(measured by TRIP-eligible DEP) was at least 98.5 percent for non-small insurers, and at least 

80.3 percent for small insurers. Treasury estimates that approximately 97.5 percent of non-small 

insurers and at least 79.7 percent of small insurers reported in the 2021 TRIP data call. Treasury 

estimates that at least 99 percent of non-small insurers and at least 78 percent of small insurers 

reported in the 2020 TRIP data call.

47

Treasury estimates that between 85 to 95 percent of alien surplus lines insurers responded to the 

2020, 2021, and 2022 TRIP data calls.

48

Determining the response rate for captive insurers under TRIP is complicated by the fact that 

captive insurers typically do not submit publicly available information that could be used by 

47 Treasury evaluatesthe response rates to the TRIP data calls by analyzing information reported to state insurance 

regulators as well as independently analyzing insurers where the available state data was not dispositive of the 

particular insurer’s obligation to participate in the TRIP data call. Some amount of non-reporting may be 

attributable to small insurers that are under the reporting threshold. Treasurywill continue to analyze the response 

rates in future reports.

48 Alien surplus lines insurers also report certain information to state regulators, and Treasury uses a process to 

evaluate the response rate for alien surplus lines insurers that is similar to the process it uses for domestic insurers.
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Treasury to independently evaluate their response rate. Therefore, Treasury has engaged with 

state insurance regulators and brokers that work with captive insurers to confirm that the 

appropriate number of captive insurers report for the TRIP data calls.49 Based upon the available 

information and the consistency of results year over year, Treasury estimates that the significant 

majority of captive insurers that write terrorism risk insurance subject to the Program, on either 

an embedded or standalone basis, have provided information in response to the 2020-2022 TRIP 

data calls.

D. Data Quality Evaluation

This Report includes analysis of data for 2019 through 2021, relying on the results of the 2020-

2022 TRIP data calls, with a particular focus on the 2021 and 2022 TRIP data calls conducted 

since Treasury’s last Effectiveness Report.50 Treasury compared the results of its data calls with 

state reporting data for the same period to further validate the accuracy of reported data. The 

comparison between TRIP data calls and state reporting data is relevant because TRIP-eligible 

lines are defined by regulation with general reference to state insurance reporting lines. The 

Program uses state-defined insurance lines and reporting data standards to determine the 

“property and casualty insurance” that is subject to the Program, which promotes efficient 

Program administration. This process also allows Treasury to determine whether the data 

reported by non-small and small insurers under TRIP data calls is generally consistent with 

similar data reported for state regulatory purposes.51

Figure 3 compares the premiums reported to Treasury in the 2021 and 2022 TRIP data calls with

the premiums reported by non-small and small insurers for state regulatory purposes.52 Some 

adjustments are made to the state data to account for variations between certain state statutory 

reporting lines and the premiums that are subject to TRIP and collected by Treasury.

53

49 Treasury only requires reporting from captive insurers to the extent that they issue terrorism risk insurance that is 

subject to the Program. Captive insurers that write policies in the TRIP-eligible lines of insurance, but which do not 

provide any terrorism risk insurance (whether on an embedded or standalone basis), do not have a reporting 

requirement. See 2022Terrorism Risk Insurance Program Data Call, 87 Fed. Reg. 22026 (April 13, 2022).

50 Some figures in this Report relating to the 2020and 2021 TRIP data calls may not be identical to similar 

information previously reported by Treasury because of late-reported or corrected data submitted after publication of 

prior reports. Similarly, late-reported or corrected data received in the future in connection with the 2022 TRIP data 

call may result in future reporting by Treasury of information different from that reported here.

51 For purposes of this Report, Treasury evaluated the data reported by domestic non-small and small insurers that 

regularly make public statutory insurance filings by comparing the Treasury data with the reporting lines for state 

insurance regulatory purposes. Treasury has addressed this adjustment process in prior reports. See FIO, Study of 

Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2017), 11, 

https://home.treasury.gov/system/files/311/Study_of_Small_Insurer_Competitiveness_in_the_Terrorism_Risk_Insur

ance_Marketplace_%28June_2017%29.pdf (2017 Small Insurer Study). Most alien surplus lines and captive 

insurers do not make such filings; therefore, this analysis does not extend to those Program participants.

52 Treasury performed this analysis in the 2020 Effectiveness Report, in connection with the data collected in the 

2019 and 2020TRIP data calls, and concluded that the data reported to Treasury was consistent with the more 

general information reported by those insurers for state regulatory purposes. FIO, 2020Effectiveness Report, 13-14.

53 The principaldifferences between state reporting lines and TRIP-eligible lines are: (1) certain lines of insurance 

(principally Fire and Allied Lines, but also other lines) encompass policies written to cover personal, and not 
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Figure 3: Comparison of TRIP-Eligible DEP Reported in Treasury Data Calls

to TRIP-Eligible DEP Reported to State Regulators

Source: 2021 and 2022 TRIP data calls; S&P Global Market Intelligence (as of May 22, 2022)

The data provided by reporting insurers in the 2021 and 2022 TRIP data calls is consistent with 

the data that insurers reported for state regulatory purposes. Therefore, the reported data is

sufficient for the purpose of analyzing the effectiveness of the Program.54

commercial, exposures, which are not subject to TRIP; and (2) Professional Liability insurance is not subject to 

TRIP, even though it is reported for state purposes under the Other Liability line of insurance, which is otherwise a 

TRIP-eligible line of insurance. See 31 C.F.R. § 50.4(w)(2021). Other small (and offsetting) differences arise from 

the manner in which Treasury collects data, which Treasury has addressed in prior reports. See FIO, 2018 

Effectiveness Report, note 53.

54 One commenter suggested that Treasury should also assess in its Effectiveness Reports matters concerning 

Program administration (resources, testing, personnel, contracting, etc.), as well aslessons learned from the COVID19 pandemic, including the potential use of a TRIP model for a pandemic insurance program, and the potential 

interplay between other federal relief measures and TRIP in the wake of a certified “act of terrorism.” See CBI 

Program Administration Comments. This report focuses, as instructed in TRIA § 104(h)(2), on program 

effectiveness and terrorism risk insurance market issues.
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V. ANALYSIS OF THE OVERALL EFFECTIVENESS OF THE PROGRAM

TRIA was established to “protect consumers by addressing market disruptions and ensure the 

continued widespread availability and affordability of property and casualty insurance for 

terrorism risk,” and to permit private markets to stabilize, resume pricing, and build capacity.55 

Based on Treasury’s analysis, the Program has been largely effective in meeting these statutory 

objectives. Stakeholders—representing the interests of insurers, reinsurers, and commercial 

policyholders—generally agree that the Program has been effective in achieving its statutory 

objectives.56 The 2020-2022 TRIP data calls indicate that the market for commercial P&C 

insurance in general and terrorism risk insurance in particular remains relatively stable, with 

insurance both affordable and available to U.S. policyholders. Terrorism risk insurance is 

available in the market for a relatively low cost and is purchased by the majority of commercial 

policyholders in the United States, including by the majority of places of worship. Private 

reinsurance capacity for terrorism risk insurance has increased since the creation of the Program. 

The Report addresses these observations in more detail below, relying upon the 2020-2022 TRIP 

data calls. The Report then discusses the projections from modeled loss questions, as well as

terrorism risk insurance for nuclear, biological, chemical, or radiological (NBCR) attacks and for 

cyber losses.

A. General Program Observations

Several commenters cited the Program as the principal mechanism that has made terrorism risk 

insurance available and affordable since the inception of the Program in 2002, and observed that 

the Program has had a stabilizing effect on the market for commercial P&C insurance generally 

and terrorism risk insurance in particular.57 As reported by certain observers, market fluctuations 

55 TRIA §101(b).

56 See 2022 Report on the Effectiveness of the Terrorism Risk Insurance Program, 

https://www.regulations.gov/docket/TREAS-TRIP-2022-0010/comments(collecting and providing links to 

comments).

57 See NCCI Comments, 4 (“Given the challenges presented by the terrorism peril, Congress determined a workable 

solution was needed that provides primary insurance carriers with a mechanism to manage the impact of the 

terrorism peril. That solution was the creation of TRIP and it appears it may have contributed to a relatively stable 

workers compensation market.”); APCIA Comments, 1 (“[T]he Terrorism Risk Insurance Act (TRIA) is essential to 

the continued availability of terrorism insurance in the property casualty insurance market. Terrorism continues to 

be a challenging peril to model and to insure, but the federal backstop provided by TRIA helps to ensure that 

terrorism coverage is available to those sectors of the U.S. economy that need it.); AM Best Comments, 1 (“The 

Program has been—and continues to be—effective in expanding the availability of terrorism insurance and making 

it affordable.”); NAMIC Comments, 2 (“TRIP [is] a risk-sharing model between insurers, policyholders, and the 

federal government that–in addition to providing an immediate stabilizing effect in the short-term following a 

terrorist attack–has acted to create space for a robust private market for terrorism insurance to form where it would 

not have otherwise.”); Marsh Comments, 1 (“[T]he program has been very successful in allowing insurers and 

reinsurance capacity back into the market, while providing numerous la yers of protection to the federal 

government—and ultimately the US taxpayer.”); RAA Comments, 1 (“By limiting insurers’ exposure to 

catastrophic terrorism losses, TRIA has enhanced the private market for such coverage and has had a stabilizing 

influence on the economy. Under TRIA and its extensions, the availability of terrorism risk insurance has 

increased.”); Lloyd’s Comments, 1 (“TRIP has been and remains quite effective and successful since its enactment. 

It serves its purpose of stabilizing the insurance market and the economy in times of uncertainty and provides for a 

smooth recovery in the event of a future terrorist attack.”); CIAT Comments, 1 (“TRIP remains extremely effective 
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have taken place when the Program has lapsed or when there has been uncertainty over whether 

it would be reauthorized.58

In seeking public comments in connection with this Report, Treasury specifically inquired 

“[w]hether, and in what fashion, insurance market changes associated with the impact of the 

COVID-19 pandemic have also affected the market for terrorism risk insurance.” 59 The 

commenters that addressed the issue indicated that they did not observe any associated impact on 

the terrorism risk insurance market.60 Based upon its evaluation of the terrorism risk insurance 

data over the past few years, Treasury has not observed any fundamental changes in the market 

dynamics for terrorism risk insurance as a result of the COVID-19 pandemic. Treasury will 

continue to evaluate this issue as necessary.

The Program mechanics—the amount of the Program Trigger, the individual insurer deductibles, 

and the co-pay shares—also affect how the market for terrorism risk insurance now operates.61

The 2015 Reauthorization Act prescribed changes to the Program mechanics that would occur

over time, which have caused a continued shift of exposure from the federal government to the 

private market for terrorism risk insurance. Treasury has not observed any market disruption or 

impediments to participation caused by these changes to the Program mechanics. Although the 

in achieving its primary purpose, which is to ensure the continued availability of terrorism coverage for commercial 

policyholders . . . . TRIP has been the key factor in ensuring that the private insurance market remained intact and 

has continued to meet the American economy’s needs in this respect largely through private risk capacity 

backstopped by this Program.”); VCIA Comments, 3 (“TRIP has been highly effective in ensuring that terrorism 

insurance coverage is available to those wanting or needing such insurance.”). Compare United Comments, 1 (“The 

evidence of TRIA’s effectiveness is further demonstrated by the ragged state of the war risk and cyber markets 

where no such Federal backstop exists.”).

58 See, e.g., Congressional Research Service, Terrorism Risk Insurance: Overview and Issue Analysis(2022), 1, 

https://crsreports.congress.gov/product/pdf/R/R47042 (“It is unclear how the insurance market would react to the 

expiration of the federal program, although at least some instability might be expected were this to occur.”); FM 

Global Comments, 3-4 (noting that the periodic fixed expiration of the Program results in significant market 

uncertainty, and requires insurers to issue “conditional renewal notices that have to be versatile enough to 

accommodate an expiration, renewal, or renewal with change, of TRIA, which makes them very complex”); CIAT 

Comments, 2 (“Indeed, we continue to see evidence that capacity would dwindle without TRIA. During each 

reauthorization cycle of TRIA, CIAT members have seen policy renewals with ‘springing exclusions’that would 

void terrorism cover if TRIA were to expire during the policy term.”); AM Best Comments, 1 (“Program 

reauthorization 12 months prior to expiration would diminish market disruption and capacity concerns in the 

future.”).

59 2022 Report on the Effectiveness of the Terrorism Risk Insurance Program, 87 Fed. Reg. 18473, 18474 (March 

30, 2022), https://www.federalregister.gov/documents/2022/03/30/2022-06681/2022-report-on-the-effectiveness-ofthe-terrorism-risk-insurance-program.

60 See CIAT Comments, 2 (“The COVID-19 pandemic has created substantial disruption in the insurance 

marketplace, but in general the market for terrorism risk insurance has remained stable.”); Lloyd’s Comments, 2 

(also not observing terrorism risk insurance market impacts on account of COVID-19, attributing the “stability in 

this market to the effectiveness of the TRIA program, where the cost-sharing mechanism of a federal backstop gives 

insurers greater ability to manage exposure, and thus offer coverage at rates that policyholders are willing to pay”); 

FM Global Comments, 1; NAMIC Comments, 2; United Comments, 1.

61 The ACRSM also considered whether the Program has transferred too much risk away from the federal backstop 

to the private market. See Report of the Advisory Committee on Risk-Sharing Mechanisms (2020), 10-13, 

https://home.treasury.gov/system/files/311/5-20-ACRSM-Report-Final.pdf(ACRSM Report). The work of the 

ACRSM is discussed in Section IX.
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2019 Reauthorization Act did not modify any of the Program mechanics from those in place 

during calendar year 2020, any increases in industry premiums over time will result in a 

corresponding increase in industry and policyholder exposure.62 Treasury will continue to 

monitor and study this issue, as discussed further in this Report. 63

B. Availability of Terrorism Risk Insurance

The availability of insurance for terrorism risk refers to whether insurers offer coverage for 

losses arising from an act of terrorism. Even when insurers “make available” terrorism risk 

coverage as required by TRIA, they retain the ability to limit their terrorism risk exposure in 

various ways. For example, insurers can limit their exposure to terrorism risk through pricing 

mechanisms, by declining to underwrite particular risks, or by excluding coverage for certain 

forms of terrorism loss (where permitted by state law) such as for NBCR attacks. 64 Insurers may 

also decline to write a particular line of insurance entirely if that line presents too great a risk of 

loss on account of terrorism.

In assessing whether participating insurers are complying with the “make available” requirement, 

this Report considers the specific experience indicated by the data calls for commercial 

multi-peril (CMP) insurance. CMP insurance is a type of commercial package policy that

contains coverage for more than one peril in a single policy. Such insurance products are more 

likely to be purchased by smaller or medium-sized businesses.

65 The TRIP data calls indicate 

CMP products produced a significant proportion (31 percent in 2021) of all policy premiums 

62 For example, the IMARA (which measures aggregate industry payments that, if not exceeded in a calendar year, 

require Treasury to recoup any amounts that it expends under the Program)increased from $40.9 billion in calendar 

year 2020 to $42.7 billion in calendar year 2022, on account of the growth in annual industry premium in the TRIPeligible lines of insurance. In addition, since the IMARA is the average of aggregate insurer deductibles under 

TRIP, the increase in the IMARA signals a similar increase in the individual deductibles of individual insurers 

before they are entitled to make a claim for the federal share under TRIP.

63 Many countries with substantial insurance markets have adopted some sort of terrorism risk insurance mechanism 

that relies (to a greater or lesser degree) upon government involvement in case of a significant terrorism event. FIO 

participates in the activities of the International Forum for Terrorism Risk (Re)Insurance Pools (IFTRIP, an 

organization of international terrorism risk insurance programs), as part of its assistance to the Secretary in the 

administration of TRIP. See generally “Sharing Knowledge About Terrorism Risk,” International Forum for 

Terrorism Risk (Re)Insurance Pools, http://iftrip.org/ (organization of international terrorism risk insurance 

programs, providing general information and news); Wendy Peters, The Terrorism Pool Index (2022), 

https://www.wtwco.com/en-US/Insights/2022/05/terrorism-pool-index-2022 (summarizing salient features of 

terrorism risk programs in IFTRIP member countries). In 2022, Treasury hosted the IFTRIP 2022 Livestream event 

which addressed panel discussions addressing public/private partnerships in the wake of the COVID-19 pandemic, 

the potential interrelationship between climate change and terrorism risk, and the role of insurers in promoting 

resilience and better risk practices. The event featured closing remarks by Treasury Deputy Secretary Wally 

Adeyemo addressing the role of insurers in promoting better cyber risk practices. “IFTRIP Conference 2022,” 

IFTRIP, https://iftrip.org/iftrip-conference-2022/.

64 The extent of terrorism risk insurance for NBCR losses is 

addressed further below in Section V.H.

64 The extent of terrorism risk insurance for NBCR losses is addressed further below in Section V.H.

65 As noted by industry sources, policies that package together multiple lines typically needed by small businesses 

are generally more cost effective for such businesses than purchasing separate policies for each line of insurance. 

See generally “Understanding Business Owners Policies (BOPs),” Insurance Information Institute, 

https://www.iii.org/article/understanding-business-owners-policies-bops.
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reported by non-small and small insurers in the TRIP-eligible lines of insurance, excluding 

workers’ compensation.

CMP policies have a high take-up rate for terrorism coverage, which indicates that participating 

insurers are regularly “making available” terrorism risk insurance to their policyholders. In the 

2020-2022 TRIP data calls, approximately 80 percent of CMP policies (as measured by 

TRIP-eligible DEP) included coverage for terrorism risk, with high percentages observed in all 

geographic areas of the United States.66

Treasury uses a different method to assess program effectiveness in the workers’ compensation 

line of insurance business. This is because all jurisdictions require that terrorism risk coverage

be included in all workers’ compensation policies and hence the take-up rate is 100 percent. So 

instead of focusing on the take-up rate, Treasury assesses availability based on whether 

businesses purchase terrorism insurance coverage in the standard “voluntary” market in 

comparison to the residual market or whether businesses elect to self-insure. 

The standard or voluntary market refers to insurance provided by a state licensed and supervised 

insurance company through market negotiated terms. If any business cannot find an insurance 

company to provide needed insurance, then it can obtain that coverage in the residual market. 

State insurance laws require licensed insurance companies to participate in residual insurance 

markets through risk-sharing arrangements that vary from state to state. In the residual market, 

also known as the assigned market, participating insurance companies are allocated these higher 

risk customers by a market manager or other mechanism. Insurance premiums in this part of the 

market are higher, and thus reflect that they are businesses’ second rather than first choice for 

coverage. Businesses that choose to self-insure must comply with strict financial responsibility 

rules. In situations where the residual market share is large or growing it may indicate market 

stress or inefficiency. Also, expansion of the residual market can put pressure on the voluntary 

market through the requirement for insurance companies to assume these higher residual risks in 

proportion to their share of the voluntary market.

67

Available industry data indicates that the market share of the residual market based upon total 

workers’ compensation premiums has been stable since the enactment of TRIA. That share has 

ranged from 4 to 6 percent of total workers’ compensation premiums over the period between 

2007 and 2021.

68

 Similarly, the industry data indicates that the percentage of businesses selfinsuring has remained steady at between 23.9 percent in 2007 and 25 percent in 2019.

69

 

66 Using policy count data reported by non-small insurers (such information is not collected from small insurers), the 

take-up rate for terrorism risk insurance in commercial multi-peril lines measured 92 percent in the 2020 TRIP data 

call, 91 percent in the 2021 TRIP data call, and 88 percent in the 2022 TRIP data call. See also Section V.D.

67 See NCCI Comments, 2-3 (noting impact of the September 11 attacks on the increase in the share of the residual 

market for workers’ compensation risks and follow-on impact on insurers in the voluntary market). Workers’ 

compensation issues under TRIA are discussed in Section VII.

68 NCCI Comments, 3.

69 See Griffin Murphy et al., Workers’ Compensation: Benefits, Coverage, and Costs(2021), 23, 

https://www.nasi.org/wp-content/uploads/2021/10/2021-Workers-Compensation-Report-2019-Data.pdf(analysis 

from the National Academy of Social Insurance, using 2019 data) (2021NASI Workers’ Compensation Report).
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Accordingly, in the specific context of workers’ compensation insurance, terrorism risk 

insurance is generally available in the marketplace.

C. Affordability of Terrorism Risk Insurance

Terrorism risk coverage provided under TRIP is generally “embedded” in policies that also cover 

other risks. Coverage also may be provided on a “standalone” basis where the policy provides 

coverage only for terrorism risk. Such standalone policies generally are used when properties or 

operations present heightened exposure to terrorism risk.

The TRIP data calls have indicated that, depending upon the year, between 80-85 percent of the 

U.S. terrorism risk insurance market (as measured by terrorism risk insurance premium) is 

provided through embedded policies, while the remaining 15-20 percent is obtained through

standalone terrorism policies. When measured by policy limits instead of premiums, the market 

share of standalone policies is much smaller, due to the higher risk and higher premiums 

observed in the standalone portion of the market. Each type of policy is examined in greater 

detail below.

1. Embedded Terrorism Risk Insurance

Embedded terrorism risk insurance is provided within P&C policies that also cover other risks. 

TRIA requires that insurers disclose to policyholders the amount of premium charged for 

embedded terrorism risk insurance.

70

 This premium cost is often disclosed to the policyholder as 

a percentage of the total premium charged for the policy.

71

Although approximately 70 percent of insurers charge a premium for terrorism risk insurance 

within embedded policies, approximately 30 percent provide terrorism risk coverage for no 

additional charge. Figure 4 illustrates premium charges in the terrorism risk insurance 

marketplace for embedded terrorism risk insurance coverage, broken out by insurance line and in 

total, in cases where an additional charge is made for the insurance.72

70 See General Disclosure Requirements, 31 C.F.R. § 50.10 (2021); Clear and Conspicuous Disclosures, 31 C.F.R. 

§ 50.12 (2021).

71 See Clear and Conspicuous Disclosure, 31 C.F.R § 50.12(b) (2021); see also Marsh, 2019 Terrorism Risk 

Insurance Report(2019), 9, https://www.regulations.gov/comment/TREAS-TRIP-2020-0010-0004 (reflecting 

analysis of terrorism risk insurance cost by industry segment based upon percentage that terrorism risk premium 

bears to policy premium as a whole).

72 The figures in this section arebased upon the information reported to Treasury by non-small and small insurers. 

Similar information for captive and alien surplus lines insurers is reported in Sections VI.B and VI.C, respectively.
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Figure 4: Percentage of Total Policy DEP Allocated to Terrorism Risk73

Source: 2020-2022 TRIP data calls.

73 The premiums for embedded terrorism risk insurance are slightly overstated because total premiums contain a 

small amount of premium for standalone policies that cannot be removed on a line-by-line basis. When removed 

from the total figures, however, the total premiums decline by only a few hundredths of a percentage point, rounding 

to 2.9 percent in 2021.
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Figure 5 identifies policies where terrorism risk coverage is provided for no additional charge.

Figure 5: Percentage of DEP Where Policies Include Terrorism Coverage at

No Additional Charge

Source: 2020-2022 TRIP data calls

Charges for terrorism risk coverage vary not only by line of insurance but also by geographic 

area. For purposes of analysis by geographic area, Treasury generally uses either the four U.S. 

Census Regions (shown in Figure 6) or individual state jurisdictions.
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Figure 6: U.S. Census Regions

Source: U.S. Census Bureau

Figure 7 illustrates the percentage of total premiums charged for terrorism risk insurance by 

region.

Figure 7: Percentage of Total Policy DEP Allocated to Terrorism Risk (By Region) 

Source: 2020-2022 TRIP data calls
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Figure 8 illustrates the percentage of total direct earned premiums for terrorism risk insurance by 

state.

Figure 8: 2021 Percentage of Total Policy DEP Allocated to Terrorism Risk (By State)

Source: 2022 TRIP data call

Figure 9 illustrates where terrorism risk insurance was provided for no additional charge by 

region.

Figure 9: Percentage of DEP Where Policies Include Terrorism Coverage at

No Additional Charge (By Region)

Source: 2020-2022 TRIP data calls

Percentage of 

Total DEP

3.0% or more

2.5 to 3.0%

2 to 2.5%

1.5 to 2.0%

1.0 to 1.5%
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Figure 10 illustrates where terrorism risk insurance was provided for no additional charge by 

state.

Figure 10: 2021 Percentage of DEP Where Policies Include Terrorism Coverage at

No Additional Charge (By State)

Source: 2022 TRIP data call

Charges for terrorism risk insurance also vary by the policyholder’s industry sector. Figure 11 

illustrates the policyholder industry sectors of terrorism risk insurance premiums as a percentage 

of total insurance premiums, as reported by non-small and alien surplus line insurers.74

74 Policyholder industry code data was not requested from small insurers. Industry code data for policyholders 

insured by captive insurers is provided in Section VI.B.

Percentage of 

Total DEP

More than 60%

50 to 60%

40 to 50%

30 to 40%

20 to 30%

0 to 20%
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Figure 11: Percentage of Total Policy DEP Allocated to Terrorism Risk for

Non-Small and Alien Surplus Lines Insurers (By Policyholder Industry Sector)

Source: 2020-2022 TRIP data calls
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The data from the 2020-2022 TRIP data calls demonstrates that terrorism risk insurance provided 

on an embedded basis continues to be priced at a relatively small percentage of the total 

premiums charged for policies, approximately 3.0 percent on average when a charge is made, 

although that figure has increased slightly over recent years. Additionally, approximately 31

percent of the time, as measured by DEP, terrorism risk insurance is provided for no additional 

charge–a figure that has also increased slightly. Charges for terrorism risk insurance do vary to 

some extent by line of insurance, geographic area, and the policyholder’s industry sector.

2. Standalone Terrorism Risk Insurance

Standalone terrorism risk insurance policies only provide coverage for losses arising from 

terrorism, unlike policies providing terrorism risk insurance on an embedded basis. As reported 

by industry sources, standalone coverage is purchased primarily by organizations that are viewed 

by insurers as being at relatively high risk of loss due to terrorism in the following situations: 

when terrorism coverage is not available as part of the commercial property policy, when the 

price of terrorism coverage from the insurer providing the commercial property policy is too 

high, or when the terrorism coverage offered by the insurer providing the commercial property 

policy is too narrow.75

Standalone terrorism coverage can be provided either through “certified” standalone terrorism 

risk policies which are written subject to the terms and conditions of TRIP or through “noncertified” standalone terrorism policies which do not meet the terms and conditions of TRIP. 

Non-certified standalone terrorism policies therefore insure terrorism-related losses (as defined 

in the specific policy) regardless of whether the Secretary has certified an act of terrorism under 

TRIA. Any losses paid by insurers under non-certified standalone terrorism risk policies would 

not be eligible for reimbursement under TRIP.

As shown in Figure 12, DEP under certified standalone terrorism risk insurance policies 

accounted for a higher percentage than total DEP earned under non-certified standalone 

policies.76 

Figure 12: Percentage of Standalone Policies that are

Certified Versus Non-Certified (By DEP)

Certified Policies Non-Certified Policies

2019 2020 2021 2019 2020 2021

Alien Surplus Lines Insurers 32.4% 47.8% 55.4% 67.6% 52.2% 44.6%

Captive Insurers 94.5% 86.6% 90.4% 5.5% 13.4% 10.0%

Non-Small Insurers 34.8% 54.5% 55.2% 65.2% 44.6% 44.5%

All Insurer Categories 67.4% 67.0% 76.1% 32.6% 32.7% 23.3%

Source: 2020-2022 TRIP data calls

75 “Stand Alone Terrorism Coverage,” International Risk Management Institute, 

https://www.irmi.com/online/insurance-glossary/terms/s/stand-alone-terrorism-coverage.aspx.

76 Small insurers have not reported any meaningful amount of terrorism risk insurance identified as standalone 

terrorism coverage for the last three reporting periods and are accordingly omitted from the analyses in this section.
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The data also suggests that standalone terrorism policies in each insurer category can vary 

significantly in terms of cost and whether they provide coverage under TRIA. Figure 13 

illustrates the average cost for standalone terrorism policies, by insurer category, depending upon 

whether certified or non-certified coverage is provided.

Figure 13: 2021 Certified Standalone Versus Non-Certified Standalone Policies by

Policy Count and DEP

Certified Standalone Policies Non-Certified Standalone Policies

# of 

Policies Total DEP

Average 

Policy Cost

# of 

Policies Total DEP

Average 

Policy Cost

Alien Surplus Lines Insurers 5,485 $ 96,097,857 $ 17,520 2,478 $ 77,429,914 $ 31,247 

Captive Insurers 295 464,407,081 1,574,261 3 51,215,658 17,071,886 

Non-Small Insurers 2,504 85,582,062 34,178 1,800 68,870,881 38,262 

All Insurer Categories 8,284 $ 646,087,000 $ 1,625,960 4,281 $ 197,516,453 $ 17,141,395 

Source: 2022 TRIP data call

The TRIP data calls do not request information on the total coverage (i.e., policy limits) provided 

under non-certified standalone policies, and the disparity in average policy cost between certified 

and non-certified policies may be due to differences in the relative size or nature of exposures 

covered under each type of policy. However, the disparity could also indicate a higher cost 

associated with non-certified standalone policies compared to certified standalone policies.

Treasury cannot determine, based upon the data, the extent to which the cost difference is due to 

the lack of federal support for non-certified policies, higher policy limits under non-certified 

policies, a combination of these factors, or other considerations. For non-small insurers, the data 

for 2021 does not reflect any significant difference in the relative cost of the different types of 

standalone terrorism policies. Alien surplus lines insurers and captive insurers reported a higher

total average cost for non-certified standalone policies than the cost charged for certified 

policies. Treasury will continue to monitor and assess these issues.

Certified standalone terrorism risk insurance policies, which do provide TRIA coverage, account 

for under one-fifth of all terrorism risk insurance DEP subject to the Program (15.8 percent in 

2021), with the balance of approximately 84 percent earned through embedded policies. 

However, the cost of coverage under certified standalone policies is also significantly higher than 

the cost of coverage under embedded policies. Measured by the limits of liability of all policies 

insuring terrorism risk under the Program, certified standalone policies accounted for about 0.5

percent of total policy limits in 2021.

Figure 14 shows the amount of premium charged per $1 million in coverage under embedded 

policies compared to standalone policies covering TRIA-certified events.
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Figure 14: Embedded Policies Versus Certified Standalone Policies:

Premium Charged Per $1 Million in Policy Limits

Embedded Terrorism Standalone Terrorism

2019 2020 2021 2019 2020 2021

Alien Surplus Lines Insurers $ 121 $ 92 $ 37 $ 176 $ 496 $ 190

Captive Insurers 861 766 980 1,195 897 939 

Non-Small Insurers 9 18 19 67 151 265 

All Insurer Categories 15 26 26 438 558 488 

Source: 2020-2022 TRIP data calls

As noted above, the data indicates that the rate charged for terrorism coverage under embedded 

policies is typically lower than the rate charged for standalone policies. This indicates that 

standalone policies are more likely to be issued to policyholders viewed as presenting exposures 

subject to a higher risk of terrorism attack.

D. Take-Up Rates for Terrorism Risk Insurance

TRIA requires an offer—but does not mandate the purchase—of terrorism risk insurance.77 

Therefore, the extent to which terrorism risk insurance is purchased by policyholders (the 

take-up rate) may approximate the distribution of insured payments in the event of a terrorist 

attack. A higher take-up rate means that the losses arising from a terrorist attack will be more 

likely to be covered by private insurers.

A take-up rate based on the number of policies will be likely influenced by the large number of 

small policies covering risks with lower insured values. Alternatively, a take-up rate measured 

by DEP or policy limits will be more influenced by policies covering larger businesses with 

more insured property and liability exposure. The latter comes closer to reflecting the amount of 

insured business activity in the economy.

Analyses by Treasury between 2005 and 2014 found that the take-up rate, when measured by the 

percentage of policies containing terrorism coverage, increased from 27 percent in 2003 (the first 

full year of the Program) to approximately 60 percent by 2006.78 In its 2020 Effectiveness 

Report, Treasury found the take-up rates to be higher, ranging from 63 percent to 79 percent 

77The take-up rate data discussed in this section do not consider workers’ compensation, which has a 100 percent 

take-up rate as a matter of state law. Section VII discusses the impact of the Program on workers’ compensation 

insurers.

78 Office of Economic Policy, U.S. Department of the Treasury, Assessment: The Terrorism Risk Insurance Act of 

2002 (2005), 3, 84, https://www.treasury.gov/resource-center/fin-mkts/Documents/tria_studyby_treas.pdf; 

President’s Working Group on Financial Markets (PWG), Terrorism Risk Insurance: Report of the President’s 

Working Group on Financial Markets(2006), 42-44, https://home.treasury.gov/system/files/311/report.pdf; PWG, 

Market Conditions for Terrorism Risk Insurance 2010 (2010), 23, https://www.treasury.gov/resource-center/finmkts/Documents/PWG%20Report%20Final%20January%2013.pdf; PWG, The Long-Term Availability and 

Affordability of Insurance for Terrorism Risk (2014), 30, https://www.treasury.gov/resource-center/finmkts/Documents/PWG_Terrorism_2014.pdf.
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depending upon the year, and whether take up was measured by policy count, DEP, or insured 

values.79

Figure 15 illustrates the take-up rates in 2020 by policy count, DEP, and property and liability 

policy limits. Information is based upon alien surplus lines, non-small, and small insurer 

reported data.80

Figure 15: 2020 Terrorism Risk Insurance Take-Up Rates by

Policy Count, DEP, and Policy Limits (by Insurer Category)

Policy Count DEP Property Limits Liability Limits

Alien Surplus Lines Insurers 30% 44% 40% 77%

Non-Small Insurers 79% 60% 64% 53%

Small Insurers81 N/A 66% 37% 61%

All Insurer Categories 76% 59% 62% 55%

Source: 2021 TRIP data call

Figure 16 illustrates the take-up rates in 2021 by the same measures.

Figure 16: 2021 Terrorism Risk Insurance Take-Up Rates by

Policy Count, DEP, and Policy Limits (by Insurer Category)

Policy Count DEP Property Limits Liability Limits

Alien Surplus Lines Insurers 31% 45% 35% 95%

Non-Small Insurers 77% 61% 61% 44%

Small Insurers82 N/A 60% 51% 63%

All Insurer Categories 75% 60% 59% 51%

Source: 2022 TRIP data call

Similar to the price of terrorism risk insurance, the take-up rate of terrorism risk insurance also 

varies by the geographic region of the United States, and by state. In its 2020 Effectiveness 

Report, Treasury found that take-up rates varied by region in 2018 and 2019, with higher rates 

observed in the Northeast than in other regions when measured by DEP, but not when other 

methods of measurement were considered.83 Figure 17 shows the 2020 take-up rates indicated 

for the Northeast, Midwest, South, and West regions, using the same benchmarks of policy 

count, DEP, and insured value.

79 FIO, 2020 Effectiveness Report, 29.

80 Captive insurers do not present similar issues to admitted insurers with respect to take-up rates, because the 

decision of a captive owner to insure its terrorism risk exposure with a captive insurer is a self-insurance decision as 

opposed to a market decision (although the cost of terrorism risk insurance in the marketplace at large may influence 

the decision to self-insure through a captive insurer). The captive insurance market for terrorism risk insurance is 

addressed in Section VI.B.

81 Treasury did not require small insurers to provide policy count information in the 2021TRIP data call.

82 Treasury did not require small insurers to provide policy count information in the 2022TRIP data call.

83 FIO, 2020 Effectiveness Report, 30-31.
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Figure 17: 2020 Terrorism Risk Insurance Take-Up Rates by

Policy Count, DEP, and Insured Value (by Region)

Policy Count DEP Property Limits Liability Limits

Northeast 68% 63% 65% 56%

Midwest 80% 63% 69% 58%

South 75% 57% 56% 53%

West 80% 57% 59% 51%

All Regions 76% 60% 61% 54%

Source: 2021 TRIP data call

Figure 18 shows the 2021 take-up rates using the same metrics.

Figure 18: 2021 Terrorism Risk Insurance Take-Up Rates by

Policy Count, DEP, and Insured Value (by Region)

Policy Count DEP Property Limits Liability Limits

Northeast 68% 63% 66% 55%

Midwest 79% 64% 68% 46%

South 73% 57% 52% 46%

West 79% 58% 56% 45%

All Regions 75% 60% 59% 47%

Source: 2022 TRIP data call

Figure 19 illustrates take-up rates, based upon DEP, by region.84

Figure 19: Terrorism Risk Insurance Take-Up Rates By DEP (by Region)

Source: 2020-2022 TRIP data calls

84 Similar to the other analyses by region, the information illustrated is based upon non-small and small insurer 

reporting only.
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Figure 20 illustrates take-up rates, based upon DEP, by state (for 2021 only).

Figure 20: 2021 Terrorism Risk Insurance Take-Up Rates by DEP (By State)

Source: 2022 TRIP data call

The Appendices provide further detail on how take-up may vary by state, type of insurance, and 

small versus non-small insurers. Appendix 1 contains a table setting forth the 2021 take-up rates 

presented in Figure 20 by state for both small and non-small insurers combined, as well as 

additional detail on small and non-small insurers. Appendix 2 provides more detailed take-up 

information for small and non-small insurers, by state and by groups of TRIP-eligible lines of 

insurance.

Take-up rates also vary by individual line of insurance. Figure 21 shows the take-up rate within

each TRIP-eligible line of insurance (excluding workers’ compensation), by DEP.

Take-Up Rate

65 to 70%

60 to 65%

55 to 60%

50 to 55%

45 to 50%

70 to 75%
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Figure 21: Terrorism Risk Insurance Take-Up Rates in TRIP-Eligible Lines

(by DEP)

Source: 2020-2022 TRIP data calls
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Figure 22 shows the take-up rate by policy count.

Figure 22: Terrorism Risk Insurance Take-Up Rates in TRIP-Eligible Lines

(by Policy Count)

Source: 2020-2022 TRIP data calls
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Figure 23 shows the take-up rate in TRIP-eligible property lines by property policy limits.

Figure 23: Terrorism Risk Insurance Take-Up Rates in TRIP-Eligible Lines

(by Property Policy Limits)

Source: 2020-2022 TRIP data calls
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Figure 24 shows the take-up rate in TRIP-eligible lines by liability policy limits.

Figure 24: Terrorism Risk Insurance Take-Up Rates in TRIP-Eligible Lines

(by Liability Policy Limits)

Source: 2020-2022 TRIP data calls
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Take-up rates also vary by policyholder industry sector, as illustrated by Figure 25.

Figure 25: Terrorism Risk Insurance Take-Up Rates

by Policyholder Industry Sector (by TRIP-Eligible DEP)85

Source: 2020-2022 TRIP data calls
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Treasury also requested more specific data from non-small, alien surplus lines, and captive 

insurers concerning risk exposures in 26 specific metropolitan areas. 86 This information 

addressed, among other things, the policy property limits assumed by each reporting insurer that 

are subject to the Program (as well as by those not subject to the Program because terrorism risk 

insurance was not obtained). In the 2020-2022 TRIP data calls, about 98 percent of the reported 

policy exposures were identified with a particular geographic region—either a specific 

metropolitan area, or in the balance of the United States not associated with the specified 

metropolitan areas.

87 Furthermore, the results obtained for each specified metropolitan area 

show that the aggregate reported policy property limits are generally proportional to gross 

domestic product in most metropolitan areas, thus generally validating the data reported by 

insurers.

88

 Figure 26 illustrates the combined results obtained from the 2020-2022 TRIP data 

calls.

86 The metropolitan areas identified are identical to those utilized by A.M. Best when considering the terrorism risk 

exposures of the companies it evaluates.

87 Reporting insurers were also permitted to identify premiums by geographic region in an “unknown” category, 

indicating that the policy exposure could not be retrieved by geographic location, whether by one of the specified 

metropolitan areas or in the balance of the United States. Although the “unknown” category has accounted for 

higher percentages in TRIP data calls before 2020, the figure has only been about 2 percent per year since the 2020 

TRIP data call.

88 See generally “Regional Data,” Bureau of Economic Analysis 

https://www.bea.gov/iTable/iTableHtml.cfm?reqid=70&step=1&isuri=1.
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Figure 26: Terrorism Risk Insurance Take-Up Rates by Metropolitan Area

(by Policy Property Limits)

Source: 2020-2022 TRIP data calls
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Take-up rates by property exposure for areas outside a defined metropolitan area were reported 

to be 67 percent in 2019, 68 percent in 2020, and 70 percent in 2021—figures comparable to the 

indicated figures for all metropolitan areas combined (71 percent in 2019, 65 percent in 2020, 

and 65 percent in 2021). The exposure that is covered under the Program in all other areas in the 

United States is significant and exceeds the total property limits covered in the 26 metropolitan 

areas. Based upon the results of the data calls, 67.1 percent of all insured property exposures 

under the Program fell within the “all other locations in the United States” category in 2019

versus 32.9 percent in the identified metropolitan areas. In 2020, the reported figures were 68.6

percent and 31.4 percent, respectively, and in 2021 they were 69.1 percent and 30.9 percent, 

respectively.

E. Availability and Affordability of Terrorism Risk Insurance for Places of 

Worship

The 2019 Reauthorization Act modified TRIA to require that, in reports concerning the 

effectiveness of the Program, the Secretary provide “an evaluation of the availability and 

affordability of terrorism risk insurance, which shall include an analysis of such availability and 

affordability of terrorism risk insurance specifically for places of worship.” 89 Although Treasury 

had previously analyzed the availability and affordability of terrorism risk insurance generally as 

a measure of the effectiveness of the Program, Treasury had not previously collected information 

specific to places of worship in its annual data calls. Treasury modified its data call beginning in 

2020 by including a new reporting worksheet specifically addressing coverage issued to places 

of worship.90

The Places of Worship worksheet seeks premium information, allocated by whether the 

policyholder obtained terrorism risk insurance in the general categories of property, liability, and 

workers’ compensation insurance. The codes specified for reporting are limited to religious 

organizations,91 which are intended to best approximate the premises associated with places of 

worship. The information collected can be analyzed to assess the take-up and cost of terrorism 

risk insurance by places of worship, which is how Treasury typically evaluates whether such 

insurance is available and affordable in the marketplace.

Figures 27 and 28 show the take-up of terrorism risk insurance by places of worship, by 

premium, by insurer category and type of coverage.

89 2019 Reauthorization Act, § 502(c); TRIA §104(h)(2)(B). 

90 See FIO, 2020 Effectiveness Report, 40.

91 The Places of Worship worksheet permits reporting by the specified North American Industrial Coding System 

(NAICS) code, Standard Industrial Classifications (SIC) code, or Insurance Services Office (ISO) Class Codes, as 

well as by other methodologies that are calculated to isolate the premium of reporting insurers associated with places 

of worship. The worksheet instructions state that premium associated with religious-affiliated institutions (such as 

hospitals or schools) that are not principally places of worship should not be reported. All insurers subject to the 

data call were required to complete the Places of Worship worksheet.
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Figure 27: Terrorism Risk Insurance Take-Up Rates by Places of Worship (by Property

Premium) (by Insurer Category)

Source: 2020-2022 TRIP data call

Figure 28: Terrorism Risk Insurance Take-Up Rates by Places of Worship (by Liability 

Premium) (by Insurer Category)92

Source: 2020-2022 TRIP data call

92 Insufficient liability premium was reported by alien surplus lines insurers to permit any meaningful comparisons.
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Figure 29 shows the percentage charge, by property premium, for places of worship, by insurer 

category; Figure 30 shows the same percentage charge information based upon liability 

premium.

93

Figure 29: Percentage of Total Policy Property DEP Allocated to Terrorism Risk for 

Places of Worship (by Insurer Category)

Source: 2022 TRIP data call

93 Treasury did not collect information when a $0 premium for terrorism risk insurance was identified for places of 

worship. Therefore, this cost analysis is based upon the total amount of terrorism risk premium charged against 

TRIP-eligible lines premium where terrorism risk insurance was provided. 
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Figure 30: Percentage of Total Policy Liability DEP Allocated to Terrorism Risk for Places 

of Worship (by Insurer Category)94

Source: 2022 TRIP data call

Places of worship obtain terrorism risk insurance at rates that exceed those of policyholders 

overall (approximately 80 percent versus 60 percent in 2021, as measured by premium). The

cost paid by places of worship is higher than the amount paid by policyholders overall – about 

2.8 percent of total TRIP-eligible lines premiums for places of worship compared to 1.7 percent 

of total premiums for policyholders overall, once the effect of policies under which coverage 

provided for a $0 charge is considered. The higher cost for terrorism risk insurance for places of 

worship could possibly be explained by the higher take-up rate for the insurance. Also of note is 

the significant role played by small insurers, which represented in 2021 (by premium) about 53

percent of this marketsegment, even though they only constituted approximately 11 percent of 

the entire 2021 market in the TRIP-eligible lines of insurance. Treasury will continue to evaluate 

the availability and affordability of terrorism risk insurance for places of worship in future 

reports.

F. Private Reinsurance Availability

Reinsurance mechanisms support the proper functioning of insurance markets, and Treasury has

followed reinsurance markets in connection with their potential impact on the market for 

terrorism risk insurance.95

94 Insufficient liability premium was reported by alien surplus lines insurers to permit any meaningful comparisons.

95 For information on reinsurance markets generally, see FIO, The Breadth and Scope of the Global Reinsurance 

Market and the Critical Role Such Market Plays in Supporting Insurance in the United States(2015), 

https://home.treasury.gov/system/files/311/FIO%20-Reinsurance%20Report.pdf. See alsoFIO, 2018 Effectiveness 

Report, 40-41 (observing that the reinsurance market in the United States “has generally been characterized by large 

amounts of capacity for P&C business, and a resulting decline in prices as reinsurers seek to place business”); FIO, 

2020 Effectiveness Report, 42(noting “more significant variations in reinsurance pricing and capacity depending on 
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The most recent reports reflect reinsurance market capacity has been “ample,” or at least 

sufficient for most P&C risks, with some challenges for loss-impacted accounts.96 Reports 

reflect that reinsurance pricing has generally strengthened, although more specific reports note 

flat to modest increases for most accounts, with more substantial increases for loss-impacted 

accounts.97 Reinsurance provides significant support for the developing cyber risk insurance 

market, and sources note that potential reinsurance capacity constraints going forward will be a 

significant factor in the market.98 Stakeholders report continued growth in the global reinsurance 

markets, with reported annual growth in reinsurance dedicated capital of 8.4 percent in 2021, and 

a full 70 percent over the entire period from 2015 to 2021, for an average annual rate over the 

period of 6 percent.99 Reinsurance capacity has been and continues to be augmented by 

significant competition from alternative risk mechanisms such as insurance-linked securities.

100

However, alternative risk mechanisms have not been a significant factor in the area of terrorism 

risk exposure.101

To the extent it is available and purchased by insurers writing terrorism risk insurance, private 

reinsurance may serve both to increase the availability of terrorism risk insurance and to reduce 

Program exposure. Since the enactment of TRIA, Treasury has evaluated reinsurance capacity 

geography and line of business, as well as upon the loss record of the particular ceding insurer and existing client 

relationships”).

96 Guy Carpenter, January 2022 Reinsurance Renewal, An Evolving Market Leads to Divergent Outcomes, 2-3, 

https://www.guycarp.com/content/dam/guycarp-rebrand/pdf/Insights/2022/January-1-2022-Renewal-Briefing.pdf

(GC January 2022 Reinsurance Renewal).

97 Gallagher Re, Reinsurance Market Report: Results for Full-Year 2021 (2022), 3, 

https://www.ajg.com/gallagherre/news-and-insights/2022/april/reinsurance-market-report-full-year-2021/

(Gallagher Re 2021 Reinsurance Report); GC January 2022 Reinsurance Renewal, 2-3.

98 GC January 2022 Reinsurance Renewal, 3; JohnFarley, 2022 Cyber Insurance Market Conditions Report,

(2022), 3, https://www.ajg.com/us/news-and-insights/2022/jan/2022-cyber-insurance-market-report/ (“With as much 

as 45% of primary cyber insurance market premium ceded to reinsurers, we expect capacity constraints to continue 

impacting underlying market pricing alongside an evolving cyber threat landscape. (Re)insurers’ ability to generate 

capacity will be an important factor in 2022.”); see also AM Best Comments, 4 (“Anumber of reinsurers are willing 

to assume cyber risk from the primary companies for which they already provide reinsurance for other lines of 

business. This has resulted in some concentration of cyber risk at the reinsurance level and is concerning. Since the 

reinsurers are already familiar with the primary insurers’ portfolios and underwriting, they are more comfortable 

providing them reinsurance for cyber while also monitoring their aggregate risk.”). However, from a reinsurance 

pricing standpoint, the significant increase in direct cyber insurance premiums has made flat ceding commissions 

common where the risk could be placed. GC January 2022 Reinsurance Renewal, 3. For more on the cyber 

insurance market, see Section V.I.

99 Gallagher Re 2021 Reinsurance Report, 8.

100 Representing about $94 billion of total estimated reinsurance dedicated capital of $728 billion as of 2021. See

Gallagher Re 2021 Reinsurance Report, 4.

101 Treasury is aware of only one significant alternative risk transfer instrument for terrorism risk. In February 2019, 

Pool Reinsurance Co. Ltd. (Pool Re), the government-backed mutual terrorism reinsurance facility in the United 

Kingdom, brought the first-ever terrorism risk catastrophe bond, in an amount of £75 million (about $100 million) to 

market as part of its general retrocessional program for its terrorism risk exposures. See “Pool Re Sponsors First 

Terrorism Risk Catastrophe Bond, Baltic PCC,” Artemis, January 14, 2019, https://www.artemis.bm/news/pool-responsors-first-terrorism-risk-catastrophe-bond-baltic-pcc/. In March 2022, Pool Re increased the amount of the 

bond to £100 million (about $135 million) as part of its total retrocessional tower of £2.5 billion (about $3.4 billion). 

See “Pool Re’s New Cat Bond Upsized to UK£100m as it Renews Retro Tower,” Artemis, March 2, 2022,

https://www.artemis.bm/news/pool-re-new-cat-bond-upsized-to-uk-100m-as-it-renews-2-5bn-retro-tower/.
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for terrorism risk in prior reports. In earlier analyses, Treasury found that such capacity was 

limited and had remained relatively static since shortly after the September 11 attacks. 102 Since 

the commencement of the TRIP data calls in 2016, however, Treasury has observed that 

reinsurance capacity for terrorism risk has increased.

103 Treasury’s observations are consistent 

with the observations of commenters that reinsurers may now have a greater willingness to cover 

conventional (i.e., non-NBCR) terrorism risks than was indicated by Treasury’s earlier

analyses.104

Commenters report that many reinsurers have been increasingly willing to offer reinsurance 

coverage for conventional terrorism risk as part of ceding insurers’ catastrophic risk reinsurance 

programs otherwise principally devoted to natural catastrophe risks.

105

 While this development 

means that a growing amount of terrorism risk reinsurance is available to potentially satisfy 

losses, such reinsurance limits are subject to erosion or exhaustion on account of non-terrorism 

related claims, such as hurricane losses, potentially making them unavailable to back terrorism 

losses in some instances. The data reported to Treasury since the 2020 Effectiveness Report

continues to support the observation that many insurers are obtaining terrorism risk reinsurance 

in connection with reinsurance placements for natural catastrophe risks. However, the total 

amount of purchased reinsurance that will respond to terrorism risk continues to trail the amount 

of reinsurance purchased for natural catastrophe risks (except in the case of captive insurers, 

which purchased more terrorism risk reinsurance than natural catastrophe reinsurance). For 

comparison purposes, Treasury requested information about the reinsurance contract terms (i.e., 

amount of coverage, attachment point, and co-participation share) for treaties covering terrorism 

risk and natural catastrophe risk. Figure 31 identifies the total amounts of per loss terrorism risk 

reinsurance purchased by responding insurers that will cover losses subject to the Program. 106

102 See PWG, 2006 Terrorism Risk Insurance Report, 26 ($4-6billion of terrorism reinsurance capacity in 2005, $6-

8 billion in 2006); PWG, 2010Market Conditions Report, 19 (between $6-8 billion to $8-10 billion); PWG, 2014 

Availability and Affordability Report, 19 ($6-8 billion).

103 In 2018 and2019,insurers responding to TRIP data calls (excluding captive insurers) reported a total of $74.4

billion and $72.6billion,respectively, in reinsurance coverage for a single loss resulting from terrorism. Based 

upon other reported information, in both 2018 and 2019, approximately 76 percent of these amountsfell within the 

co-pay obligations of the reporting insurers above their Program deductibles, with the remaining balance falling 

within the insurer’s TRIP deductible. Captive insurers separately obtained an additional $26.6 billion and $28.9

billion in 2018 and 2019,respectively, in per loss terrorism reinsurance limits, and an even higher percentage of 

those figures fell within the co-pay obligations of the captive insurers. FIO, 2020Effectiveness Report, 44.

104 See RAA Comments, 3 (“Reinsurers have been willing to put a defined amount of capital at risk for terrorismrelated losses due to the nature of the risk, insurer demand for risk transfer and the price they are willing to pay,” 

and noting that in 2017 “the combined property and workers’ compensation private conventional-only terrorism 

reinsurance capacity was estimated to be $2.5 billion per cedent program.”). This figure remains generally 

consistent with the information reported to Treasury, although a small number of insurers in both the 2021and 2022

TRIP data calls reported total per loss limits for conventional terrorism risk approaching and even exceeding $5 

billion.

105 See RAA Comments, 3 (“[T]he inclusion of terrorism reinsurance coverage in many natural hazard property and 

workers’ compensation catastrophe covers has resulted in traditional and alternative markets supporting existing 

relationships and diversification efforts.”).

106 Treasury sets forth the total amounts of per loss limits purchased by responding insurers on an aggregated basis 

as a measure of total market capacity.
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Figure 31: Total Per Loss Reinsurance Limits Purchased for Losses Subject to TRIP

Source: 2020-2022 TRIP data calls

Figure 32 reflects the total amounts of per loss natural catastrophe reinsurance purchased by 

responding insurers during the same periods. It reflects larger total amounts of natural 

catastrophe reinsurance versus terrorism risk reinsurance purchased on a per loss basis for alien 

surplus lines, non-small, and small insurers, and lower amounts for captive ceding insurers.107

107 As in other areas, captive insurers present different issues concerning purchase of reinsurance applicable to 

terrorism risk losses. Captive insurers’ reinsurance experience is further evaluated in Section VI.B.
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Figure 32: Total Per Loss Reinsurance Limits Purchased for Natural Catastrophes

Source: 2020-2022 TRIP data calls

Private reinsurance can cover some or all of the exposure of participating insurers for amounts 

which the federal government will not reimburse under TRIP, namely amounts within: 

(1) insurers’ Program deductibles and (2) insurers’ co-pay share above the Program deductible. 

Figure 33 shows Treasury’s calculation of the degree to which reinsurance purchased by 

participating insurers for terrorism risk insurance would respond to losses within a ceding 

insurer’s Program deductible versus within the co-pay layer above the Program deductible.
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Figure 33: Total Per Loss Reinsurance Limits Purchased for TRIP Losses

Within TRIP Deductible Layer and TRIP Co-Pay Layer (by Percentage)

Source: 2020-2022 TRIP data calls

Each column in Figure 33 totals 100 percent of reinsurance purchases, as divided between 

amounts within TRIP deductibles (below the 0 percent line) and within the co-pay layer once the 

TRIP deductible has been satisfied (above the 0 percent line). The figure shows that private 

reinsurance remains more heavily concentrated in the exposure retained by participating insurers 

above their TRIP deductibles. Based on reported 2021 data, 83.3 percent of the purchased 

private reinsurance covers loss above the participating insurer’s TRIP deductible. This figure is 

materially affected by captive insurers, which purchase large amounts of reinsurance but have 

very small TRIP deductibles. When captive insurers are excluded from the analysis, the amount 

of reinsurance responding above the TRIP deductible was 77.3 percent of the total in 2021.

In many individual cases, reinsurance purchased for terrorism risk insurance remains subject to 

limitations and exclusions for specified risks. Many reporting insurers, for example, identified 

various exclusions from—or limitations to—coverage under their terrorism risk reinsurance, 

typically for exposures at particular locations and more generally for NBCR risks, discussed 

further below. Such limitations are consistent with information from industry sources and the 

U.S. Government Accountability Office (GAO) regarding the reported risk appetite of reinsurers 

for terrorism risk.108

108

 See Marsh, 2019 Terrorism Risk Insurance Report, 5 (noting the market assumption that “there is a finite amount 

of [reinsurance] capacity in the private market, especially for NBCR events.”). GAO has also found that reinsurers 

frequently write terrorism risk reinsurance with specific limits for particular properties, as distinguished from a share 

of all properties insured by the ceding insurer. See GAO, Terrorism Insurance: Treasury Needs to Collect and 
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Treasury also requests data regarding the reinsurance coverage that is expressly available for 

terrorism risks involving NBCR exposures. The data collected by Treasury for 2018 and 2019, 

which was analyzed in the 2020 Effectiveness Report, reflected significantly smaller amounts of 

reinsurance coverage for NBCR-related terrorism risk than the limits generally available for a 

terrorism loss.109 The more recent experience reported to Treasury for 2020 and 2021 is similar.

Figure 34: Total Per Loss Reinsurance Limits Purchased for

NBCR Losses Subject to TRIP (by Type of Insurance)

Source: 2021 and 2022 TRIP data calls

The reported reinsurance purchases for NBCR exposures are allocated among the various insurer 

categories as shown in Figures 35 (for 2020) and Figure 36 (for 2021).

Analyze Data to Better Understand Fiscal Exposure and Clarify Guidance (2014), 35, 

http://www.gao.gov/assets/670/663387.pdf.

109 FIO, 2020 Effectiveness Report, 47.
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Figure 35: 2020 Total Per Loss Reinsurance Limits Purchased for

NBCR TRIP Losses (by Type of Insurance), Allocated by Insurer Category ($ millions)

Source: 2021 TRIP data call

Figure 36: 2021 Total Per Loss Reinsurance Limits Purchased for

NBCR TRIP Losses (by Type of Insurance), Allocated by Insurer Category ($ millions)

Source: 2022 TRIP data call

Although TRIA requires participating insurers to offer insurance for terrorism risk for “acts of 

terrorism” certified by the Secretary on the same basis as for other perils, TRIA does not require 

such insurance to be offered for exposures for which coverage is otherwise generally not 

provided (or specifically excluded) under the policy in question.110 Because many insurers 

generally exclude NBCR risks under P&C policies (excepting workers’ compensation, as 

discussed below), the amount of direct insurance coverage for such risks may be substantially 

limited. The reported data reflects, however, that regardless of the amount of direct coverage 

available for NBCR exposures, that coverage is less likely to be supported by private reinsurance 

than losses arising from conventional acts of terrorism. Furthermore, a large portion of the 

limited reinsurance obtained for NBCR property exposures supports the risks assumed by captive 

110 See No Material Difference from Other Coverage, 31 C.F.R. § 50.22(b) (2021).
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insurers which—while potentially significant on an individual basis—represents only a small 

percentage of total risk exposures assumed by insurers participating in the Program.111

In sum, private reinsurance capacity for terrorism risk has improved significantly since the 

immediate aftermath of the September 11 attacks. Commenters attribute this improvement in 

large part to the backstop support the Program provides for a major portion of insurers’ exposure 

to terrorism risk nationwide.112 Nevertheless, commenters have noted that the aggregation risk113

presented by terrorism continues to be a limiting factor for the development of private 

reinsurance capacity.

114 Modeling applications, including accumulation models, deterministic 

scenario modeling, and probabilistic modeling of terrorism are available in the market.

115

However, the lack of significant numbers of terrorism events renders modeling potential 

terrorism exposure from both a frequency and severity standpoint difficult.

116

 The TRIP data 

reflects that private reinsurance capacity may be reduced as the aggregation risk presented by a 

particular type of terrorism loss (such as from an NBCR attack) increases.

G. Projections from Modeled Loss Questions

To assist in evaluating Program effectiveness and obtain some tangible assessment of the likely 

impact of the Program in a specific loss situation, Treasury has posed modeled loss questions in 

each TRIP data call from 2017 through 2022.

117

 Treasury has previously discussed the results of 

these questions in 2018 (for the modeled loss questions posed in the 2017 and 2018 TRIP data 

calls) and in 2020 (for the modeled loss questions posed in the 2019 and 2020 TRIP data 

calls).118

As in the prior data calls, in the 2021 and 2022 TRIP data calls Treasury posed a question to nonsmall, alien surplus lines, and captive insurers asking them to report projected loss information 

based upon a defined, hypothetical terrorism event. The 2021 TRIP data call used an event in 

111 See Section VI.B, addressing captive insurers.

112 See, e.g.,Marsh Comments, 1 (“A retrospective review of the TRIP since 9/11 demonstrates that the program has 

been very successful in allowing insurers and reinsurance capacity back into the market, while providing numerous 

layers of protection to the federal government—and ultimately the US taxpayer.”).

113 Aggregation risk refers to circumstances where the same event causes losses to a large number of policyholders 

of the same insurer, potentially in multiple lines of insurance.

114 RAA Comments, 4 (“Reinsurers can provide only limited capacity for terrorism because the magnitude of these 

potential losses could pose a solvency threat. Reinsurers’ capital is necessary to support many other outstanding 

underwriting commitments, including natural disasters, workers’ compensation and other casualty coverages.”).

115 RMS Comments, 6.

116 See RAA Comments, 4 (“[A]lthough progress has been made in modeling terrorism loss scenarios, forecasts of 

the frequency and severity of terrorism losses remain problematic.”); APCIA Comments, 1 (“While the terrorism 

insurance market has developed in some significant ways since the 9-11 attacks, insurers and reinsurers still find it 

difficult to model and provide coverage for NBCR risks.”).

117 Treasury has not required small insurersto complete the modeled loss questions in the 2017-2022TRIP data 

calls. Given the size of the market represented by small insurers, and where their risks tend to concentrate, the

experience of small insurers may not significantly affect the aggregate results, even though certain small insurers 

might sustain a significant loss.

118 See FIO, 2018 Effectiveness Report, 49-53; FIO, 2020 Effectiveness Report, 49-55.
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Washington, D.C., while the 2022 TRIP data call used an event in Miami, Florida. In both data 

calls, insurers were given a description of the location and nature of the event, with certain 

specified assumptions concerning numbers of deaths and injuries, and the scope of property 

damage. Treasury asked responding insurers to project the total amount of loss exposure arising 

from the hypothetical modeled event under their TRIP-eligible policies in force at the time of 

each such event. Treasury further requested that insurers then divide that amount among (1) the 

insurer’s net payments within its TRIP deductible; (2) private reinsurance payments within the 

insurer’s TRIP deductible; (3) federal share payment under TRIP; (4) payments by the insurer in 

the co-pay layer above the TRIP deductible; and (5) private reinsurance payments within the copay layer above the insurer’s TRIP deductible.119

Figures 37(a) and (b) illustrate how the 2021 TRIP data call modeled loss question was projected 

to result in payments.

Figure 37(a): Total Insured Loss Payments Resulting from

2021 Washington, D.C. Modeled Loss Scenario by Insurer Category ($ billions)

Source: 2021 TRIP data call

119 No questions were posed about potential exposure under liability policies in these modeled loss questions 

because of the difficulty to reasonably project how liability claims might be made in connection with an act of 

terrorism committed by a third party. Nonetheless, the possibility of liability claims remains an additional source of 

exposure to participating insurers and the Program. See, e.g., Insurance Information Institute, Terrorism Risk: A 

Constant Threat (March 2014), 6, 

https://www.iii.org/sites/default/files/docs/pdf/terrorism_white_paper_0320141_0.pdf (loss distribution estimates for 

losses arising from September 11 attacks reflecting that liability claims resulted in 12 percent of total losses). 

Treasury did ask responding insurers to report estimates associated with potential liability exposure in the 2020 

TRIP data call’s Dallas scenario. See FIO, 2020 Effectiveness Report, 50, 52-54.
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Figure 37(b): Total Insured Loss Payments Resulting from 

2021 Washington, D.C. Modeled Loss Scenario by Insurer Category (in $ millions)

Alien Surplus 

Lines Captives

Non-Small 

Insurers

Payments within the insurer’s TRIP deductible $ 334.3 $ 146.1 $ 3,331.0 

Private reinsurance payments within the insurer’s 

TRIP deductible 375.0 46.5 1,461.1 

Federal share payment under TRIP 126.6 2,126.7 116.5 

Payments by the insurer in the co-pay layer above 

the TRIP deductible 21.6 530.1 34.2 

Private reinsurance payments within the co-pay 

layer above the insurer’s TRIP deductible 10.0 15.7 0.3 

Total $ 867.5 $ 2,865.1 $ 4,943.1

Source: 2021 TRIP data call

Figure 38 sets forth how the loss amounts generated under the 2021 modeled loss scenario are 

distributed (on a 100 percent basis) within each insurer category.

Figure 38: Distribution of Loss Payments Arising from

2021 Washington, D.C. Modeled Loss Scenario Within Each Insurer Category

Source: 2021 TRIP data call
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Figure 39(a) and (b) illustrate how the 2022 TRIP data call’s modeled loss scenario (set in Miami 

in 2021) is projected to result in payments.

Figure 39(a): Total Insured Loss Payments Resulting from 

2022 Miami Modeled Loss Scenario by Insurer Category ($ billions)

Source: 2022 TRIP data call

Figure 39(b): Total Insured Loss Payments Resulting from

2022 Miami Modeled Loss Scenario by Insurer Category ($ millions)

Alien Surplus 

Lines Captives

Non-Small 

Insurers

Payments within the insurer’s TRIP deductible $ 429.0 $ 169.6 $ 895.0 

Private reinsurance payments within the insurer’s 

TRIP deductible 194.3 19.9 439.3 

Federal share payment under TRIP 143.4 82.8 - 

Payments by the insurer in the co-pay layer above 

the TRIP deductible 17.9 16.6 - 

Private reinsurance payments within the co-pay 

layer above the insurer’s TRIP deductible 18.0 4.1 - 

Total $ 802.6 $ 293.1 $ 1,334.3 

Source: 2022 TRIP data call
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Figure 40 sets forth how the loss amounts generated under the 2022 TRIP data call’s modeled 

loss scenario are allocated on a 100 percent basis within each insurer category.

Figure 40: Distribution of Loss Payments Arising from

2022 Miami Modeled Loss Scenario within Each Insurer Category

Source: 2022 TRIP data call

The reported information indicates that both the District of Columbia and Miami scenarios 

would result in losses requiring payments by Treasury, although in each of these cases (as was 

largely the case with prior scenarios posed) the amounts expended by Treasury will be subject to 

complete recovery through the recoupment process. The payments made by Treasury would be

split between those made to alien surplus line insurers and captive insurers, largely because of 

the relatively smaller deductibles for those entities as compared to non-small insurers. Under 

each of these scenarios, no Federal Share of Compensation payments would be directed to the 

affected non-small insurers (because those losses would be contained within each non-small 

insurer’s TRIP deductible). This recoupment will be at the 140 percent recoupment level 

through surcharges imposed by Treasury upon all commercial policyholders.120 Additional 

amounts would likely be subject to recoupment once small insurer losses (not captured in these

analyses) are considered.

H. Terrorism Risk Insurance for NBCR Losses

NBCR losses, to the extent arising from a certified “act of terrorism,” are within the scope of the 

Program. However, TRIA and Treasury’s implementing regulations permit an insurer to 

exclude, from the mandatory offer of terrorism risk insurance coverage that must be made, risks 

120 See Mandatory and Discretionary Recoupment, 31 C.F.R. § 50.90(b) (2021); TRIA § 103(e)(7)(D).
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that are otherwise excluded under the policy.121 Accordingly, an insurer that does not provide 

coverage for NBCR risks generally under its policy is not required to extend that coverage for 

the risk of terrorism. Because of potentially significant NBCR aggregation risks that insurers 

find difficult to manage,122 many insurers exclude these risks to some extent.

123 This means that 

in the event of a certified act of terrorism involving NBCR losses there may be less coverage for 

policyholders than would be the case in connection with losses arising from a conventional 

attack.124 The principal exception here is in connection with workers’ compensation, which as a 

matter of state law must provide coverage for all employment-related injuries, including those 

arising from NBCR risks.125 In addition, so-called “fire following” laws in some states require 

all fire losses under standard fire policies to be covered, regardless of the cause and the existence 

of what would otherwise be applicable exclusions in the policy.126

While coverage for NBCR risk under policies subject to TRIP is clearly more limited than it is 

for conventional terrorism risk, the data provided to Treasury reflects that some amount of 

NBCR terrorism risk coverage is extended by Program participants on a voluntary basis, outside

of the context of the mandatory requirements imposed by workers’ compensation and fire 

following laws. In the TRIP Data Calls, Treasury requests the amount of policy limits under 

which NBCR risk exposures are not totally excluded when insurers report the policy limits that 

are subject to TRIP (i.e., they extend coverage that would be subject to the Program’s backstop). 

Figure 41 shows the information, on a percentage basis, in a stacked bar chart that illustrates the 

percentage of TRIP property limits extending coverage for some amount of NBCR risk, by 

insurer category, from 2019-2021.

121 TRIA § 103(c)(2); 31 C.F.R. § 50.22(b) (2021).

122 In its analyses, ACRSM identified potential NBCR aggregation risks with examples based upon modeled results. 

See ACRSM Report, 24.

123 Commenters noted the difficultyin obtain terrorism risk coverage for NBCR risks, particularly in areas deemed 

to be at greater risk. See Marsh Comments, 6 (“Although limited NBCR coverage has been available from insurers 

over the past 20 years, the market capacity for this coverage remains selective and finite, especially in large cities 

and central business districts and for certain types of occupancies.”). In addition, GAO has previously analyzed the 

difficulty the policyholders may have in obtaining insurance coverage for these risks. See GAO, Terrorism 

Insurance; Status of Coverage Availability for Attacks Involving Nuclear, Biological, Chemical, or Radiological 

Weapons(December 2008), https://www.gao.gov/assets/gao-09-39.pdf.

124 See, e.g.,FIO, 2020 Effectiveness Report, 51-52(discussing results of modeled loss question in a hypothetical 

attack in San Francisco involving both conventional and non-conventional attack modes and showing greater losses 

for non-small and alien surplus lines insurers arising from the conventional attack, but greater losses for captive 

insurers from the non-conventional attack).

125 The impact of the requirement to provide NBCR coverage in connection with workers’ compensation is 

discussed further in Section VII.

126 Treasury has previously addressed the implications of fire following laws in prior reports. See FIO, 2018 

Effectiveness Report, note 84.
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Figure 41: 2019-2021 TRIP Property Limits Where NBCR Risks Are Not Totally 

Excluded, by Insurer Category

Source: 2020-2022 TRIP data calls

As reflected in Figure 41, all insurer groups extend some amount of NBCR risk in connection 

with the terrorism risk limits subject to TRIP, although the percentage for captive insurers is 

higher than for other insurer categories. Figure 42 shows the same information for TRIP liability 

limits extending coverage for some amount of NBCR risk.
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Figure 42: 2019-2021 TRIP Liability Limits Where NBCR Risks Are Not Totally 

Excluded, by Insurer Category

Source: 2021-2022 TRIP data calls

The relative percentages shown for liability limits are similar to those shown for property limits. 

NBCR risk remains more challenging for Program participants and will thus be covered by the 

Program on a more limited basis in the event of a certified act of terrorism. Furthermore, the 

extent and availability of such coverage in metropolitan areas is likely far less than reflected by 

Treasury’s nationwide figures given the aggregation risk concerns in those areas. Nonetheless, 

the Program does currently provide support for some amount of NBCR risk that is voluntarily 

extended, in addition to the amounts that are driven by the statutory requirements associated with 

workers’ compensation and fire following laws. Commenters have identified the Program as 

critical support for the NBCR terrorism risk insurance (and reinsurance) coverage that is 

extended by the industry.127

Most commenters that addressed the issue of the availability of NBCR risk coverage provided in 

association with the Program characterized it as an unavoidable consequence of the nature of 

127 See Marsh Comments, 6 (“The availability of any NBCR reinsurance capacity is reliant on TRIP to remain in its 

current program format as it supports the overall market. If TRIP should lapse or be further restricted—with no 

NBCR alternative requiring all insurers to enter the reinsurance market simultaneously—the impacts remain 

unknown and untested.”); RMS Comments, 3 (“NBCR coverage under TRIP is critical for the insurance market” 

and observing that “[t]he lack of past claims experience from such attacks combined with the uncertainty around the 

frequency of NBCR attacks would lead the market to eschew covering these kinds of events” in the absence of 

TRIP).
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NBCR risk, as distinguished from a problem with the Program.

128

 Changes to the Program to 

increase the availability of NBCR terrorism risk insurance could include the requirement that it 

be mandated, as it is in connection with workers’ compensation. However, such a requirement 

could have a chilling effect on the provision of coverage overall if insurers believe themselves to 

be unable to assume such an expanded risk exposure. Modification of the TRIP sharing 

mechanism as applicable to NBCR-related risks could encourage insurers to provide more 

NBCR terrorism risk insurance.129 Further improvement in modeling techniques in connection 

with NBCR loss events could also lead to an improvement in insurer risk appetite for such 

exposures. Treasury will continue to evaluate this issue and work with the ACRSM and 

stakeholders to identify ways to further improve coverage for NBCR risks subject to the 

Program.

I. Terrorism Risk Insurance for Cyber Losses

Treasury has a longstanding interest in terrorism risk insurance for cyber losses and its 

implications for the administration of TRIP. Since 2016, Treasury has confirmed that TRIA 

requirements apply to any policy covering cyber risk written in a line of insurance that is subject 

to the Program.130 For cyber insurance that is within TRIP-eligible lines, Treasury began 

128 See, e.g., CIAT Comments, 3 (“CIAT believes that issues with the availability of NBCR cover are not—have 

never been—unique to terrorism risk, and therefore do not represent any particular flaw in the TRIA model.”); 

Lloyd’s Comments, 3 (“Excluding NBCR terrorism is consistent with TRIA’s make available requirement, since 

NBCR risk is typically excluded from policies regardless of whether terrorism caused the loss. This demonstrates 

that NBCR coverage is not a problem that is confined to TRIA or terrorism risk more generally, but rather remains 

an issue that is beyond the capacity of the private market to solve.”); Marsh Comments, 6 (“market capacity is 

selective and finite” for NBCR terrorism risk). One commenter, however, suggests that “the Program is ineffective 

with respect to the risk of loss from NBCR terrorism events,”based apparently upon the limited availability of 

NBCR reinsurance coverage to direct insurance writers, and the fact that some captive insurers provide NBCR 

terrorism risk insurance to their parent owners in a way that may not be available to other policyholders. See

generallyCBI NBCR Comments. As discussed above, while coverage provided for NBCR risk by Program 

participants is limited, some levels of coverage are provided across insurer categories. The coverage is not limited 

solely to captive insurers;and the NBCR coverage is supported in all cases by the Program. Captive insurers are 

discussed further in Section VI.Bbelow.

129 The ACRSM has proposed that FIO “[e]xplore whether a change of the cap, IMARA, and deductibles for NCBR 

is appropriate and, if not, how to address growing uninsured NCBR risk above the $100B cap.” See ACRSM Report, 

25.

130 See Guidance Concerning Stand-Alone Cyber Liability Insurance Policies Under the Terrorism Risk Insurance 

Program, 81 Fed. Reg. 95312 (December 27, 2016); 31 C.F.R 50.4(w)(1) (2021). See also 2021 Updated 

Regulations, 86 Fed. Reg. 30537. Coverage for cyber losses can also arise under policies that do not expressly state 

that they cover cyber-related losses, but which do not expressly exclude coverage for such losses. This is commonly 

referred to as “silent” or non-affirmative cyber risk. Non-affirmative cyber insurance is also subject to TRIAif 

written in a TRIP-eligible line of insurance. See 81 Fed. Reg. at 95313 (“Certain insurance policies that may contain 

a ‘cyber risk’ component or which do not exclude losses arising from a cyber event continue to be written in existing 

TRIP-eligible lines of insurance and are thus subject to the provisions of the Program.”).
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collecting data in 2018.

131 Treasury also has routinely engaged with stakeholders to discuss the 

cyber insurance market and significant developments in it.

132

In 2022, Treasury expanded the TRIP data call to request more detailed information concerning 

cyber risk insurance.

133 As Treasury explained, “[t]he cyber insurance market continues to grow 

and evolve, and cyber-related losses (particularly with regard to ransomware) have increased 

significantly over the past few years. In view of recent market developments and the important 

role of cyber insurance in the Program, Treasury would like to obtain more detailed information 

relating to the availability and affordability of such coverage in the market.”134 With respect to 

cyber insurance, therefore, Treasury now also requests information in the TRIP data call on: 

(1) premiums and limits of policies written in both TRIP-eligible and non-TRIP-eligible lines of 

insurance, (2) premium and policy count information broken out by size of policyholder, 

(3) cyber extortion coverages, and (4) loss information for ransomware exposures.

135

 Treasury 

did not receive complete reporting of these new data elements in the first year of collection, and 

specifies below the limitations of the new data based upon the amount of reporting received in 

the different categories.

Before discussing the analysis of the cyber insurance information collected in the 2022 TRIP 

data call, this Report outlines some general information on cyber insurance coverage and the 

cyber insurance market. Conditions in the cyber insurance market will affect the scope of 

insurance that may be extended by cyber insurers that may also provide coverage for certified 

acts of cyber terrorism. Those conditions may also inform Treasury’s administration of the 

Program and its evaluation of cyber insurance subject to TRIP, particularly where there have 

been significant changes and developments in the cyber insurance market. The Report also 

discusses one significant area in the cyber insurance market: the rise and impact of ransomware. 

1. Cyber Insurance Coverage

Cyber insurance has been characterized as providing coverage for risks arising “from the use of 

electronic data and its transmission, including technology tools such as the internet and 

telecommunications networks,” as well as (depending upon the policy’s terms and conditions) 

potentially providing coverage for physical damage that can be caused by cyber attacks, misuse 

of data, liability arising from data storage, and other risks associated with the availability, 

integrity and confidentiality of electronic information.136 The types of events that may be 

131 See Terrorism Risk Insurance Program 2018 Data Call, 82 Fed. Reg. 56328, 56329 (November 28, 2017). Not 

all cyber insurance is written within TRIP-eligible lines. For example, cyber insurance can also be written as 

Professional Liability Insurance, which is expressly excluded from the Program. 81 Fed. Reg. at 95313; TRIA 

§ 102(11)(B)(xi). See also Section V.I.3 below (addressing results of TRIP data call reflecting amount of cyber 

insurance coverage not within the scope of TRIP).

132 See, e.g., FIO, 2020 Effectiveness Report, 56, 61-62.

133 See Terrorism Risk Insurance Program 2022 Data Call, 86 Fed. Reg. 64600 (November 18, 2021) (TRIP 2022 

Data Call Changes); 2022 Terrorism Risk Insurance Program Data Call, 87 Fed. Reg. 22026 (April 13, 2022).

134 TRIP 2022 Data Call Changes, 86 Fed. Reg. at 64601 (citations omitted).

135 See, e.g., TRIP 2022 Data Call Changes, 86 Fed. Reg. at 64601-64602.

136 See FIO, Annual Report on the Insurance Industry (2017), 54, https://www.treasury.gov/initiatives/fio/reportsand-notices/Documents/2017_FIO_Annual_Report.pdf. 
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covered by cyber insurance include malware, ransomware, phishing, social engineering, cloud 

outage, and data exfiltration.137 Coverage for losses associated with such events that may be 

available under a cyber insurance policy may include the costs of forensic investigations, 

litigation expenses, regulatory defense expenses and fines, crisis management expenses, business 

interruption losses associated with the event, and cyber extortion costs. While cyber insurance

products vary, they can be characterized as falling into two broad categories: (1) coverage 

provided for cyber-related losses in a separate, “standalone” policy; and (2) coverage provided as 

a component of a broader, package policy that also provides coverage for non-cyber losses.

The scope of coverage will be defined by the terms, conditions, and exclusions within the cyber 

insurance policy. Exclusions may, for example, limit coverage for losses involving third-party 

suppliers, lost devices, or security controls.138 More broadly, cyber policies will often contain 

exclusions to address situations where significant losses might aggregate as the result of a major 

event that has systemic implications beyond the scope of an individual policyholder. For 

example, most policies exclude losses from the failure of critical infrastructure such as the power 

grid, telecommunication systems, or the internet.139 Quantifying potentially systemic cyber risks 

remains a significant challenge for insurers and reinsurers.

140

137 Malware, or malicious software, is any program or file that is intentionally harmful to a computer, network or 

server. Types of malware include computer viruses, worms, Trojan horses, ransomware, and spyware. These 

malicious programs steal, encrypt, and delete sensitive data, and may alter or hijack core computing functions and 

monitor end users’ computer activity. See, e.g., “Malware,” National Institute of Standards and Technology (NIST) 

Computer Security Resource Center (CRSC), https://csrc.nist.gov/glossary/term/malware (NIST CRSC Glossary).

Ransomware is a type of malware that prevents the user from accessing computer files, systems, or networks, and 

demands the payment of a ransom for the restoration of access. See, e.g., “Scams and Safety: Ransomware,” 

Federal Bureau of Investigation, https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/ransomware. 

Often, the ransom payment is requested through cryptocurrency or blockchain methods that may provide a degree of 

anonymity for the recipient of the payment. See MITRE Comments, 1.

Phishing is a technique for attempting to acquire sensitive data, such as bank account numbers, through a fraudulent 

solicitation in email or on a web site, in which the perpetrator masquerades as a legitimate business or reputable 

person. See “Phishing,” NIST CRSC Glossary, https://csrc.nist.gov/glossary/term/phishing.

Social engineering is an attempt to trick someone into revealing information (e.g., a password) that can be used to 

attack systems or networks. See, e.g., “Social Engineering,” NIST CSRC Glossary, 

https://csrc.nist.gov/glossary/term/social_engineering.

A cloud outage is a period of time during which cloud services (i.e., a range of information technology resources 

that are provided through the Internet) are unavailable. See, e.g., “Cloud Outage,” TechTarget, 

https://www.techtarget.com/searchdisasterrecovery/definition/cloud-outage.

Data exfiltration is the unauthorized transfer of information from a system. See, e.g., “Exfiltration,” NIST CSRC 

Glossary, https://csrc.nist.gov/glossary/term/exfiltration.

138 PerkinsCoie, “Common Exclusions Invoked by Cyber Carriers to Deny Coverage,” Tech Risk Report Blog, 

February 20, 2019, https://www.techriskreport.com/2019/02/common-exclusions-invoked-cyber-carriers-denycoverage.

139 See, e.g., American Academy of Actuaries, Cyber Risk Toolkit (2022), 25,

https://www.actuary.org/sites/default/files/2022-02/CyberRiskToolkit.Feb22.pdf.

140 See, e.g., Geneva Association and IFTRIP,Insuring Hostile Cyber Activity: In Search of Sustainable Solutions

(2022), 16-19, https://www.genevaassociation.org/sites/default/files/research-topics-documenttype/pdf_public/cybersolutions_web.pdf (Sustainable Solutions Report). Industry sources reflect that cyber risk 
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Most policies will also have a war exclusion. Such exclusions may address, to varying degrees,

both cyber losses directly associated with a conventional, “kinetic” war as well as losses more 

indirectly linked to a hostile act by a nation-state actor. The exclusionary language traditionally 

used to address “acts of war” may extend beyond war to encompass a range of hostile activity

that could include crime, political unrest, and terrorism.141 Because of the potential impact of the 

“make available” requirement under TRIA in this area,

142 many insurers have sought to address 

this issue by providing for a carveout from war exclusions for cyber attacks certified by Treasury 

as an “act of terrorism.”

Insurers continue to evaluate the extent to which they are willing to extend dedicated affirmative 

cyber cover for state-sponsored cyberattacksthat may seek to further national goals or 

potentially support terrorist or criminal groups but which are not outright military conflict. The 

issue has been raised in the context of the NotPetya attacks in 2017, attributed to Russian nationstate actors against Ukrainian interests, which spread beyond Ukraine to many entities on a 

worldwide basis. Certain P&C insurers that faced NotPetya-related claims under non-cyber 

insurance policies invoked standard war exclusions (which largely did not speak to cyber 

impacts) in defense of the claims. While litigation on those issues continues, one recent New 

Jersey trial court decision rejected that defense.143 Industry reports indicate that most insurers 

providing dedicated cyber cover implicated by NotPetya paid claims without invoking a war 

exclusion. The aggregate impact of those attacks has been estimated to have caused more than 

$10 billion in losses on a worldwide basis.

144 It also has led cyber insurers to evaluate the extent 

to which they are willing to assume the risk of potential systemic exposures driven by nationmodeling techniques are improving, which could make available further market capacity as the industry develops a 

better understanding of the potential risk exposures, particularly for systemic events that may be difficult for insurers 

to fully evaluate or exclude from their policies. See John Farley, 2022 Cyber Insurance Market Conditions Report, 

(2022), 3, https://www.ajg.com/us/news-and-insights/2022/jan/2022-cyber-insurance-market-report/ (“We also 

expect continued cyber loss modeling tool development as the market pushes for further insights into the farreaching threats of systemic cyber risk.”); RAA Comments, 5 (“[M]odeling of cyber risks has improved in the last 

few years and, accordingly, such models may provide an enhanced ability to understand the impact of cyber-related 

terrorism events.”). Risk evaluation for cyber risk is further complicated in that cyber risks can cascade across 

geographic and/or commercial boundaries, which limits the ability of insurers and reinsurers to use traditional risk 

transfer strategies (focusing on the region, industry, or size of the entity insured) and will need to reevaluate 

underwriting strategies to account for such differing accumulation risks. See generally Jon Bateman, War, 

Terrorism, and Catastrophe in Cyber Insurance: Understanding and Reforming Exclusions (2020), 

https://carnegieendowment.org/2020/10/05/war-terrorism-and-catastrophe-in-cyber-insurance-understanding-andreforming-exclusions-pub-82819.

141 The Geneva Association, in association with IFTRIP, has recently generated a series of papers that explores the 

insurability issues posed by the insurance of cyber risk in these areas. See Geneva Association and IFTRIP, Cyber 

War and Terrorism: Towards a Common Language to Promote Insurability (2020), 

https://www.genevaassociation.org/research-topics/cyber/CTCW-common-language; Geneva Association and 

IFTRIP, Mapping a Path to Cyber Attribution (March 30, 2021), https://www.genevaassociation.org/researchtopics/cyber/cyber-attribution-research-report; Geneva Association and IFTRIP, Sustainable Solutions Report.

142 TRIA §103(c)(1) (“make available” requirement of “coverage for insured losses”); TRIA § 102(5) (“insured 

loss” means “any loss arising from an act of terrorism”). 

143 Merck & Co, Inc, et al. v. ACE American Insurance Company, et al.,No. UNN-L-2682-18, 2022 WL 951154

(N.J. Superior Ct. Union Cty. Jan. 13, 2022).

144 Andy Greenberg, “The Untold Story of NotPetya, the Most Devastating Cyberattack in History,” Wired, August 

22, 2018, https://www.wired.com/story/notpetya-cyberattack-ukraine-russia-code-crashed-the-world/.
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state actors, particularly where a government has attributed the attack to a nation-state actor. 

Lloyd’s, for example, has released a series of policy wordings providing different levels of 

coverage for cyber events that may involve nation-state actors.145 With the onset of the RussiaUkraine conflict in 2022, Treasury (through FIO) has observed insurers and regulators taking 

steps to address potential ambiguities as they relate to war exclusions for cyber incident 

exposures. 

2. Cyber Insurance Market and Ransomware

The cyber insurance market remains a small but growing component of the U.S. P&C market. 

Treasury estimates of the cyber insurance market are provided in Section V.I.3 below; the NAIC 

estimates that the size of the U.S. cyber insurance market in 2020 was $4.1 billion in direct

written premium, a 29.1 percent increase over the previous year.146 The NAIC figures include 

the premium of alien surplus lines insurers, which make up about 30 percent of the cyber 

insurance market in the United States, with direct written premium of approximately $1.3 billion. 

The United States continues to dominate the worldwide cyber insurance market.

147

Cyber insurance is, however, a relatively small part of the total U.S. P&C insurance market. 

Cyber insurance contributes only 0.38 percent of direct written premiums in the overall P&C 

market in the United States.148 Similarly, the amount and limits of cyber insurance is 

significantly smaller than the limits of insurance otherwise available in the TRIP-eligible 

property or liability lines. For example, in the 2022 TRIP data call, responding insurers reported 

total nationwide property limits subject to TRIP (irrespective of whether terrorism risk insurance 

was obtained) of about $270 trillion, and total liability limits subject to TRIP of about $150 

trillion. By contrast, the corresponding figure for all cyber limits (whether subject to TRIP or 

whether terrorism risk insurance was obtained) was only $2.4 trillion.

Cyber insurance is the fastest growing product segment in the P&C insurance market. Growth in 

the cyber insurance market has been driven (at least in part) by a significant increase in cyber 

incidents, particularly ransomware. Nearly two-thirds (63 percent) of global financial 

145 Lloyd’s Market Association Bulletin, “Cyber War and Cyber Operation Exclusion Clauses,” November 25, 2021, 

https://www.lmalloyds.com/LMA/News/LMA_bulletins/LMA_Bulletins/LMA21-042-PD.aspx.

146

 Memorandum from NAICStaff to Property and Casualty Insurance (C) Committee (October 20, 2021), 

https://content.naic.org/sites/default/files/index-cmte-c-Cyber_Supplement_2020_Report.pdf (NAIC Cyber Data 

Memo). NAIC and Treasury numbers on cyber insurance will differ. Treasury collects premium data on a direct 

earned, versus direct written, basis, as TRIP is operated on a DEP basis. Since direct written premium is wholly 

allocated to the year in which it is written, versus when it is earned, direct earned premium will lag direct written 

premium in a growing insurance market. See Section V.I.3 below (addressing cyber premium information from the 

TRIP data calls).

147 One estimate placesthe 2020 global cyber insurance market at over $7 billion in written premium, with a U.S.

share of the total market of over 50 percent. See Lucy Fraser, “Cyber Insurance – Growing the Market to Meet the 

Global Threat,” Association of British Insurers Blog,February 7, 2022, https://www.abi.org.uk/news/blogarticles/2022/02/cyber-insurance-growing-the-market-to-meet-the-global-threat/.

148 NAIC Cyber Data Memo.
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institutions experienced a rise in destructive attacks over the past year. 149 Additionally, 

ransomware is projected to remain an increased globalized cyber risk threat. 150 North American 

and European businesses are the most targeted. Some of the principal targeted sectors are 

industrial, public sector, and consumer businesses.151

Estimates of the magnitude of ransomware losses vary; however, sources report that the losses 

are significant and that they are increasing.152 Treasury has estimated that $590 million in 

payments relating to ransomware were made in the first six months of 2021, based upon 

Suspicious Activity Reports, as compared with $416 million reported for the whole of 2020. 153

Varying estimates on the scope of the ransomware problem are driven by the comprehensiveness 

of the data and different metrics being used to analyze the issue, including whether the 

information is limited to insurance-related amounts or addresses all payments made by or on 

behalf of affected parties. Recent legislation that will require mandatory reporting by critical 

infrastructure entities of covered cyber incidents to the Department of Homeland Security’s 

Cybersecurity and Infrastructure Security Agency (CISA) should assist authorities, including 

FIO, in evaluating relevant metrics.154 FIO regularly engages with CISA to evaluate insurance 

industry implications from exposures to critical infrastructure (such as utilities, pipelines, and 

financial services) on cyber terrorism coverage under TRIP and across the cyber insurance 

industry more generally.

Ransomware and other cyber incidents have led to higher claim frequency and loss severity over 

the past two years.155 Since 2019, there has been a substantial increase in cyber insurance 

pricing resulting from deteriorating loss experience coupled with increased demand for the 

149

 Phil Muncaster, “Two-Thirds of Global Banks Witness Surge in Destructive Attacks,” Infosecurity Magazine, 

April 21, 2022, https://www.infosecurity-magazine.com/news/global-banks-surge-destructive; Tom Kellerman, 

Modern Bank Heists 5.0 (2022), 

https://www.vmware.com/content/dam/learn/en/pdf/carbonblack/Modern%20Bank%20Heists%205.0%20Report.pd

f.

150 Cybersecurity and Infrastructure Security Agency (CISA), 2021 Trends Show Increased Globalized Threat of 

Ransomware(2022), https://www.cisa.gov/uscert/ncas/alerts/aa22-040a.

151 NCC Group, Monthly Threat Pulse February 2022 (2022), https://www.mynewsdesk.com/nccgroup/news/nccgroup-monthly-threat-pulse-february-2022-444577.

152 See, e.g.,A.M. Best, Ransomware and Aggregation Issues Call for New Approaches to Cyber Risk” (2021), 

http://www3.ambest.com/bestweek/purchase.asp?record_code=309212 (reporting that total claims rose 18 percent in 

2020 owing strictly to first-party ransomware claims, which were up 35 percent in 2020 and now account for 75

percent of cyber claims); Marsh Comments, 7-8 (detailing the increase in ransomware payments by size and 

frequency since 2019). 

153 U.S. Treasury, Financial Crimes Enforcement Network (FinCEN), Advisory on Ransomware and the Use of the 

Financial System to Facilitate Ransom Payments (November 8, 2021), 4 n.15, 

https://www.fincen.gov/sites/default/files/advisory/2021-11-

08/FinCEN%20Ransomware%20Advisory_FINAL_508_.pdf. This increase in the frequency of attacks has been 

accompanied by increased sophistication and larger extortion demands, in part linked to the development of 

“ransomware-as-a-service” where specialist malware developers sell software code to other cybercriminals. Id. at 4.

154 See Cyber Incident Reporting for Critical Infrastructure Act of 2022, Pub.L. No. 117-103 (2022).

155

 Fitch Ratings, “US Cyber Insurance Sees Rapid Premium Growth, Declining Loss Ratios,” news release, April 

13, 2022, https://www.fitchratings.com/research/insurance/us-cyber-insurance-sees-rapid-premium-growthdeclining-loss-ratios-13-04-2022. 
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product—with both resulting in part from the significant increase in ransomware claims.156

Cyber insurance loss ratios were only 48 percent in 2015, and then trended downward from 2016 

to 2018 until they increased from 47 percent in 2019 to 72 percent in 2020.157 That loss history

has led to significant price increases for the product—one estimate cited a 74 percent increase in 

2021 alone for cyber insurance as compared with nine percent in the P&C industry overall. 

These price increases have contributed to a modest improvement in the cyber insurance loss ratio 

between 2020 to 2021.158 Commenters report that cyber insurance premiums continue to 

increase, and that current demand for cyber risk limits exceeds the capacity of the insurance 

market to extend such limits, at least at rates that policyholders are willing or able to pay.

159

Policyholders are also accepting higher retentions as a way in which to mitigate the effect of rate 

increases.160

The rapid growth in ransomware exposure has led insurers to tighten underwriting standards to 

better evaluate cyber loss controls before providing coverage. These standards include, among 

other things, whether the prospective policyholder is using multi-factor authentication for access 

to systems, the training platforms of businesses, and policyholder adherence to best practices for 

security standards.161 Such requirements may incentivize better cyber security behavior by 

policyholders and thus improve their resiliency. 

Absent some change in the current market dynamics, industry sources believe that cyber insurers 

will continue tightening policy terms and conditions (including exclusions), while increasingly 

seeking to limit the extent to which cyber coverage may be provided under non-cyber policies.162 

Additionally, one commenter noted that “cyber liability policies typically include an exclusion 

for bodily injury and physical property damage,” meaning that their coverage for an event of 

cyber terrorism would not extend to such losses.163 To the extent that TRIP-eligible lines 

policies that do cover bodily injury and physical property damage seek to exclude coverage for 

156 FIO previously noted the beginning of this hardening of the cyber market on account of ransomware experience. 

See, e.g.,FIO, 2020 Effectiveness Report, 56.

157 Fitch Ratings, “US Cyber Insurance Sees Rapid Premium Growth, Declining Loss Ratios”; The Council of 

Insurer Agents & Brokers, Commercial Property/Casualty Market Index, Q3 2021, 4, 

https://www.ciab.com/download/32268/.

158 Fitch Ratings, “US Cyber Insurance Sees Rapid Premium Growth, Declining Loss Ratios.”

159 See Marsh Comments, 6-7 (“As of March 2022, pricing increases have not shown signs of slowing down. 

However, we expect rates to stabilize in the second half of 2022 as underwriters will have had a full twelve months 

to recalibrate their cyber portfolio.”); Marsh Comments, 8 (“Some [policyholders] are reducing policy limits, driven 

in part by budget constraints, but also due to limited insurer appetite for risk where certain security controls and 

corporate governance appears to be lacking or insufficient.); RMS Comments, 3 (“Insurers have also managed their 

risk by reducing line sizes – making cover harder to come by. Demand far outpaces supply in the current market, 

creating hard market conditions and a large protection gap for many insureds. Even with new market entrants, and 

some insurers writing more premium, it is not enough to meet existing demand.”).

160 Marsh Comments, 9.

161 Council of Insurer Agents & Brokers, Commercial Property/Casualty Market Index, Q3 2021, 1 (noting inability 

of some policyholders to get cyber insurance “coverage at all if they did not implement specific carrier-requested 

cybersecurity measures”); Marsh Comments, 10.

162 Geneva Association and IFTRIP, Sustainable Solutions Report, 11.

163 See APCIA Comments, 1.
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such losses arising from a cyber event, there could be a lack of responsive coverage where a 

cyber attack is involved. These market developments could create protection gaps for 

policyholders for needed coverage, a development that FIO will continue to monitor.

3. Analysis of Data Call Information 

Both the TRIP data call and the state regulator data call require insurers to report whether their 

cyber policies are written on a “package” or “standalone” basis.164 Policies are identified as 

standalone when the policy provides coverage only for cyber risk, while package policies 

provide broader coverage, including coverage for non-cyber losses.

For the TRIP data call, respondents are required to report data for cyber policies that provide 

coverage for terrorism risk and are written in TRIP-eligible lines, even if the policy only 

responds to losses arising from non-certified acts of terrorism.165 Figure 43 summarizes 

TRIP--eligible DEP for cyber policies on a nationwide basis between 2019 and 2021.

Figure 43: 2019-2021 TRIP-Eligible DEP for Cyber Policies

Source: 2020-2022 TRIP data calls

Figure 43 reflects continued market growth in the TRIP-eligible cyber insurance market, with 

insurers reporting total TRIP-eligible cyber DEP of $3.8 billion in 2021, up from $3.5 billion in 

2020. The market remains concentrated among non-small insurers; those insurers hold over 65

164 In addition to a coordinated data call with TRIP (as discussed in Section IV), the NAIC collects data from 

insurers writing cybersecurity insurance each year through the Property/Casualty Annual Statement Cybersecurity 

and Identity Theft Supplement. See NAIC Cyber Data Memo.

165 Non-certified standalone policies are discussed in greater detail in Section V.C.2.
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percent of the market. Alien surplus lines insurers are also significant participants, with a 16

percent market share. However, the surplus lines insurers’ market share is likely understated 

given that some alien surplus lines insurer cyber premium is combined in the reports of affiliated 

non-insurers. Stakeholders cited several reasons for minimal participation by smaller insurers in 

this market (5 percent), including limited availability of loss data, lack of access to reliable 

models, and lack of specialized underwriting personnel.

Importantly, the most recent data provided in the TRIP data calls reflects that this increased 

premium in Figure 43 is not supporting the same total amount of limits as in prior years. This

demonstrates that increased premiums also have been accompanied by some retrenchment by 

cyber insurers, as insurers are increasing prices rather than expanding amount of coverage 

provided.

Figure 44 shows the price of cyber insurance per $1 million in limits between 2018 and 2021, 

based upon limits of liability under TRIP-eligible cyber policies extending terrorism risk 

insurance.

166

 The cost increase reflected in the 2021 data is generally consistent with cost 

increases reported by other industry sources and discussed above. However, because Treasury’s 

TRIP data is on a direct earned premium basis, the extent of the increase shown here is smaller 

than those reflected by other industry sources that are reported on a direct written premium basis.

Figure 44: 2018-2021 Premium Charged per $1 Million of Cyber Limits under 

TRIP-Eligible Cyber Policies

Source: 2019-2022 TRIP data calls

As Treasury has previously observed, at least some of the difference between prior estimates of 

the total U.S. cyber insurance market and the TRIP-eligible amounts reported to Treasury likely 

166 Prior to the 2022 TRIP data call, Treasury did not collect information on all limits under TRIP-eligible cyber 

policies but limited the collection to limits associated with policies under which terrorism risk insurance was 

provided. Starting in the 2022 TRIP data call, Treasury collected broader limits information on all TRIP-eligible 

lines policies.
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stems from cyber policies reported to state regulators that are written as errors & omissions and 

other forms of professional liability coverage, which is not a TRIP-eligible line of insurance.167

Among other reasons, including to ensure that Treasury has data on the amount of cyber 

insurance currently written outside the scope of the Program, Treasury expanded the TRIP data 

call in 2022 to require the reporting of cyber insurance information in the non-TRIP-eligible 

lines of insurance. Figure 45 illustrates the relative size of the TRIP-eligible and non-TRIPeligible cyber insurance markets, based upon the information reported in the 2022 TRIP data 

call.

Figure 45: 2021 TRIP-Eligible versus Non-TRIP-Eligible Cyber Insurance Market 

(by DEP)

Source: 2022 TRIP data call

Based upon the reported data collected for the first time in 2022, cyber insurance currently 

written outside TRIP-eligible lines amounts to only about five percent of the total U.S. cyber 

insurance market. However, this reported data is based upon a relatively small subset of 

reporting insurers in 2022 that responded to questions about DEP associated with non-TRIP

eligible lines of insurance.168 As a result, this five percent figure likely underestimates the 

amount of cyber insurance being written in non-TRIP eligible lines. Treasury will continue to 

evaluate the issue of cyber insurance written outside TRIP-eligible lines of insurance and take 

steps to increase the relevant reporting for future TRIP data calls. No mandatory offer of 

terrorism risk insurance needs to be made under such policies written in non-TRIP eligible lines. 

167 See FIO, 2020 Effectiveness Report, 55-56; 31 C.F.R. § 50.4(w)(2) (2021).

168 Only about 30 percent of all reporting alien surplus lines, small, and non-small insurers that reported cyber 

information generally reported any information in response to the new requests addressing cyber insurance written 

outside TRIP-eligible lines of insurance. An even smaller percentage of captive insurers reported such information, 

although they may be less likely to provide cyber insurance in non-TRIP eligible lines. In addition, insurers that 

only write cyber insurance in non-TRIP eligible lines would not have been required to report in the 2022 TRIP data 

call. 
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Additionally, insurers would not receive potential payments under the Program in connection 

with losses under such policies, even if they resulted from a cyber event that Treasury has

certified as an act of terrorism. 

In addition to obtaining more detailed information concerning the amount of cyber insurance 

written in non-TRIP eligible lines, Treasury also expanded the 2022 TRIP data call to include 

information on how cyber insurance is obtained by different sizes of policyholders, as measured 

by number of employees.169 This information on policyholder size that was collected for the first 

time in the TRIP 2022 data call is based upon a more limited sample of industry data as policy 

count of insurers allocated by policyholder size was only about 25 percent of policy count 

generally reported, and DEP of insurers allocated by policyholder size was only about 50 percent 

of the DEP generally reported. Figure 46 shows the proportion of cyber insurance (by number of 

policies) issued to small, medium, and large policyholders.

Figure 46: 2021 Cyber Insurance Issued to Small, Medium, and Large Policyholders

(by Number of Policies)

Source: 2022 TRIP data call

169 Treasury requested that reporting insurers allocate both number of cyber policies issued and DEP by small 

policyholders (100 or fewer employees), medium policyholders (101-500 employees), and large policyholders (more 

than 500 employees).
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Figure 47 shows the amount of cyber insurance issued to entities in the different size categories 

as measured by DEP.

Figure 47: 2021 Cyber Insurance Issued to Small, Medium, and Large Policyholders

(by DEP)

Source: 2022 TRIP data call

FIO will continue to evaluate cyber insurance for different sized policyholders in its 

administration of TRIP and the annual data call.

Figure 48 shows take-up rates for all cyber policies written in the TRIP-eligible lines of 

insurance (standalone and package) providing terrorism risk coverage in each insurer category.
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Figure 48: 2019-2021 Take-Up Rates for Terrorism Risk Insurance under Cyber Policies

(by TRIP-Eligible DEP)

Source: 2020-2022 TRIP data calls

Figure 48 demonstrates a significant increase in the take-up rates from 2020 to 2021. 

Additionally, take-up rates for cyber insurance covering terrorism risk subject to the Program, 

combined for all reporting insurer categories, are somewhat higher than overall take-up rates for 

the Program (compare Figure 48 to Figures 15 and 16).

Figure 49 reflects the reported premiums charged for obtaining terrorism risk insurance 

associated with standalone cyber insurance policies.

170

170 Treasury requeststhe terrorism risk premium component of cyber coverage under both standalone cyber policies 

and within the cyber component of package policies. However,muchof the information provided in connection 

with package policies may reflect the terrorism risk premium charged for the entire policy, which does not provide a 

good assessment of the terrorism risk insurance component of the cyber coverage.
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Figure 49: 2019-2021 Percentage of Total Policy DEP Allocated to Terrorism Risk Under 

Standalone Cyber Policies

Source: 2020-2022 TRIP data calls

Figure 49 demonstrates that there was an increase from 2020 to 2021 in the percentage of total 

policy DEP being allocated to terrorism risk under standalone cyber policies (5 percent in 2020 

to 8 percent in 2021). Figure 49 indicates that terrorism risk is becoming an increasingly 

relevant component of standalone cyber policies and indicates that the average premiums

associated with terrorism risk under standalone cyber policies are higher than the average

premiums charged for terrorism risk under TRIP-eligible policies in the aggregate (see, e.g., 

Figure 4). 

As discussed above, ransomware has had a significant impact upon the cyber insurance market

(of which cyber terrorism risk insurance is a key component) in terms of losses, pricing, and the 

availability of desired limits. For this reason, Treasury expanded the data call to obtain 

additional information on both the ransomware coverage provided by the cyber insurance market 

and the losses experienced by such market. Figure 50 shows the total policy limits for 

standalone cyber insurance policies as compared to the limits for cyber extortion, and the limit 

specifically for a ransom payment. Columns 2 and 3 below are subsets of the total policy limits 

expressed in Column 1.
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Figure 50: 2021 Total Cyber Policy Limits Compared Against 

Cyber Extortion Limits and Ransom Payment Limits

Source: 2022 TRIP data call

The information from the TRIP data call reflects that cyber policies in the aggregate will likely 

provide progressively lower limits depending upon whether the loss is for cyber risk generally, 

cyber extortion, or specifically for a ransom payment.

Figure 51 shows the 2021 loss experience reported by cyber insurers for cyber extortion loss 

amounts (paid and incurred), amounts specifically made for ransom payments, and cyber 

extortion defense and loss containment amounts (paid and incurred). Similar to the other new 

information categories, the reported information is based upon a smaller subset of insurers than 

those insurers that reported information on the cyber worksheet generally. This indicates that the 

reported loss information—while substantial in total—is likely low.171

171 Only about 30 percent of reporting alien surplus, small, and non-small insurers reported loss information pursuant 

to the expanded data call requests, although that group of companies constituted about 70 percent of all cyber DEP 

reported in the 2022 TRIP data call. Treasury expects insurers to report this information and the other new 

categories of information on the cyber worksheet in the 2023 TRIP data call, which is a mandatory requirement for 

participating insurers under TRIA. 
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Figure 51: 2021 Reported Cyber Extortion and Ransom Loss Figures (Paid and Incurred)

Direct Losses

($ million) % of Total

Direct Losses Paid $ 605 35%

 Direct Losses Paid: Ransom Payment or Reimbursement Only 403 23%

Direct Losses Incurred 662 38%

Direct Defense and Loss Containment Amounts Paid 232 13%

Direct Defense and Loss Containment Amounts Incurred 243 14%

Total Direct Losses Paid and Incurred and Defense and Loss 

Containment Amounts Paid and Incurred

 $ 1,742 100%

Source: 2022 TRIP data call

Based on the 2022 TRIP data call, the aggregate ransomware payment amount in 2021 was $403 

million, and insurers providing this information reported that it arose in connection with 2,541

claims.

The cyber extortion and ransomware information reported to Treasury for 2021 is generally 

consistent with, although somewhat lower than, the information provided by market sources and

commenters. This new information provides further detail on how ransomware and extortion are 

affecting the insurance market. Significantly, loss amounts reported by insurers in the TRIP data 

call (even if they are lower than the insurer experience overall) are significantly greater than

some estimates derived from reporting to law enforcement.172 While ransom payments are a 

significant portion of total cyber extortion losses for insurers, they are only 23 percent of total 

losses. Insurer’s total losses also include other direct losses of the policyholders, including direct 

defense and loss containment amounts (77 percent of total losses). 

The TRIP data call information shows that: (1) insurer information is a significant component of 

the data necessary to analyze issues related to ransomware; (2) ransom payments alone are not 

the most significant portion of total associated losses for cyber insurers; and (3) losses associated 

with ransomware are having a significant market impact on the cost and availability of cyber 

insurance, which affects the cost and availability of terrorism risk insurance for cyber acts of 

terrorism under TRIP.

4. Application of TRIP to Cyber Terrorism Losses

In its 2020 Effectiveness Report, Treasury addressed some of the issues that could be presented 

by the application of TRIP to losses resulting from cyber terrorism.173 Treasury has recognized 

that an act of cyber terrorism could potentially be certified as an act of terrorism. Indeed, 

legislative history generated during the initial enactment of TRIA in 2002 recognized cyber 

terrorism as a risk that could be within the scope of this Program, even though TRIA does not 

expressly mention cyber.174 The nature of cyber risk and cyber events presents unique issues 

172 See FBI, Internet Crime Report (2021), 14, https://www.ic3.gov/Media/PDF/AnnualReport/2021_IC3Report.pdf

(“In 2021, the IC3 received 3,729 complaints identified as ransomware with adjusted losses of more than $49.2 

million.”).

173 FIO, 2020 Effectiveness Report, 60-62.

174 See H.R. Rep. 107-779, 24, https://www.congress.gov/107/crpt/hrpt779/CRPT-107hrpt779.pdf.
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when determining whether to certify a putative act of cyber terrorism as an act of terrorism under 

TRIA, including certification and attribution, scope of coverage, and cross border issues.

Treasury highlighted some of these issues in its last Effectiveness Report because they are 

critical in how the Program might respond to a cyber terrorism event, and how the insurance 

market would view the role of the Program in such a case.

175

 These issues are also impacted by 

the fact that the cyber insurance market has continued to rapidly develop and change in recent 

years. Treasury identified these issues in its last Effectiveness Report, including the “numerous 

internal and industry efforts to develop commonalities in taxonomy, policy terms, and exclusions 

that would more appropriately reflect the cyber risks created by the embedded role of technology 

in today’s society.”176

Treasury plans to evaluate developments in the cyber insurance market in the context of the 

current availability and affordability of insurance that would extend to cyber-related losses—

both generally and specifically to a cyber “act of terrorism.”

177 This work, together with 

Treasury’s TRIP data calls, will help Treasury determine whether any Program changes are 

necessary in the administration of TRIP. That analysis could include revisions to existing 

Treasury regulations, as well as broader recommendations relating to TRIA’s mechanics. This 

analysis would be based upon FIO’s evaluation of its own data and information, interaction with 

the ACRSM, engagement with its federal and state partners in the area, and consultation with 

stakeholders.

175 Many commenters identified similar issues in the statements they submitted in connection with the current 

Report. See CBI Cyber Comments, 1-5; Lloyd’s Comments, 3; AM Best Comments, 3-4; Marsh Comments, 11-12; 

RMS Comments, 4-5; CIAT Comments, 3; AAA Comments, 3-4; RAA Comments, 4.

176 FIO, 2020 Effectiveness Report, 62.

177 GAO has also recommended that FIO, in conjunction with CISA, engage in further work in this area. See GAO, 

Cyber Insurance: Action Needed to Assess Potential Federal Response to Catastrophic Attacks (2022), 

https://www.gao.gov/products/GAO-22-104256.
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VI. ADDITIONAL ANALYSIS ON INSURER CATEGORIES

Non-small insurers represent more than 80 percent of the market for terrorism risk insurance in 

the TRIP-eligible lines of insurance, as shown in Figure 1. Many of the prior analyses in this 

Report are heavily weighted by the experience of those non-small insurers. Treasury provides 

further information here concerning the other insurer categories that participate in the Program: 

(a) small insurers, (b) captive insurers, and (c) alien surplus lines insurers.

A. Small Insurers

In 2017, 2019, and 2021 Treasury issued studies addressing domestic small insurers, which 

Treasury defined as those insurers that might not be able to obtain reimbursement under the 

Program even after satisfaction of their individual deductibles due to the Program Trigger. 178 

Treasury will continue to issue studies concerning the competitiveness of small insurers within 

the terrorism risk insurance market in alternate years, as required by TRIA.179

In the 2022 TRIP data call, Treasury again observed that, while small insurers are significant 

purchasers of private reinsurance, they do not uniformly obtain reinsurance to cover the entire 

risk of their potential exposure below the Program Trigger. As a result, there is potential for 

some small insurers to sustain losses above their Program deductibles but be unable to receive 

federal reimbursement because the Program Trigger is not met.180 In its prior reports Treasury 

has noted that, while the amount of insurance purchased by small insurers could be explained by 

probable maximum loss (PML) information reported for those insurers, a significant percentage

of small insurers remain exposed for a PML above their Program deductible and below the 

Program Trigger amount, without the support of private reinsurance for that exposure.

181

 The 

additional data now available for 2021 continues to reflect the same trend, as shown in Figure 52.

178 See FIO, 2017 Small Insurer Study, 6-7 (explaining definition of small insurers by reference to application of the 

Program Trigger). See also FIO, 2019 Small Insurer Study; FIO, Study on Small Insurer Competitiveness in the 

Terrorism Risk Insurance Marketplace (2021), 44-46, 

https://home.treasury.gov/system/files/311/2021TRIPSmallInsurerReportJune2021.pdf (2021 Small Insurer Study).

179 TRIA § 108(h).

180 See FIO, 2017 Small Insurer Study, 25-27.

181 See FIO, 2018 Effectiveness Report, 57-58; FIO, 2019Small Insurer Study, 41-43; FIO, 2020 Effectiveness 

Report, 63-64; FIO, 2021 Small Insurer Study, 44-46.
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Figure 52: 2021 Comparison Between

Small Insurer Deductibles, Reported PML Figures, and Reinsurance Purchases

Source: 2022 TRIP data call

Where reinsurance purchases approximate a small insurer’s PML, the lack of reinsurance up to 

the Program Trigger may not be significant, if the insurer is not exposed to a catastrophic loss up 

to that amount. As reflected in Figure 52, consideration of a small insurer’s PML estimate may 

explain the lack of reinsurance purchases up to the amount of the Program Trigger in many 

cases. The reported information, however, still reflects a significant number of small insurers 

that remain exposed for a PML above their Program deductible and below the Program Trigger 

amount, without the support of private reinsurance for that exposure. Commenters have 

identified the current Program mechanics as potentially problematic for small entities that may 

sustain significant losses that would still not be large enough to trigger the federal payments in 

light of Program Trigger requirements.182

B. Captive Insurers 

Captive insurers are licensed insurers formed to insure the risks of a parent or other affiliated 

entities. Such companies in the United States are supervised and regulated by the state insu rance 

182 AM Best Comments, 4 (“lowering the industry trigger from $200 million to $50 million would allow smaller 

insurers to provide coverage”); SIIA Comments, 3-4 (Treasury should “consider examining the appropriate size and 

scope of TRIP, which could and should include small- and medium-sized businesses that run the risk of significant 

losses from the same terrorism-related risks that large businesses face”).
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departments of their domicile, under state laws and regulations specifically applicable to captive 

insurers.183

U.S. domestic (domiciled or licensed) captive insurers that provide insurance in TRIP-eligible 

lines participate in the Program.184 As of 2021, there were 3,069 U.S. domiciled captive insurers 

writing various lines of insurance and reinsurance (including but not limited to the TRIP-eligible 

lines of insurance), distributed among 29 states and the District of Columbia.185 The number of 

domestic U.S. captive insurers that write terrorism risk insurance subject to the Program for 

2021, however, was 589, or approximately 19 percent of the total number of domestic U.S. 

captive insurers.

186 Those same captive insurers also write insurance that is not subject to the 

Program. In the 2022 Data Call, reporting captive insurers identified an additional $9.9 billion in 

non-TRIP-eligible lines earned premium for calendar year 2021, meaning that the TRIP-eligible 

lines DEP of those captive insurers represented about 59 percent of their total earned premium. 

The potential exposure associated with terrorism risk insurance written by captive insurers for a 

parent or other affiliated entity differs from that of conventional commercial insurers. 

Commercial insurers must “make available” terrorism risk insurance coverage to all potential, 

third-party policyholders in the TRIP-eligible lines of insurance. For captive insurers, the offer 

and acceptance of terrorism risk insurance under the Program is controlled by the insured. 

Captive insurers are also regulated under a separate regulatory regime under relevant state law. 

Therefore, even though captive insurers underwrite a significant portion of the risks for losses 

arising from acts of terrorism that are covered under TRIP, they can also be analyzed separately.

Most state insurance regulators do not require captive insurers to report information publicly 

concerning their operations. However, industry stakeholders indicate that captive insurers may 

issue policies for terrorism risk subject to the Program that provide coverage that otherwise

might not be readily available, such as for NBCR risks, “trophy” or “iconic” properties, and 

locations in other higher-risk geographical areas, such as sporting arenas and properties in 

183 TRIA defines a captive insurer as an insurer licensed under the captive insurance laws or regulations of any state. 

31 C.F.R. § 50.4(g)(2021).

184 See 31 C.F.R. § 50.4(o)(1)(i)(A)(2021). See alsoTerrorism Risk Insurance Program, 68 Fed. Reg. 41250, 

41259-60 (July 11, 2003), https://www.gpo.gov/fdsys/pkg/FR-2003-07-11/pdf/03-17585.pdf.

185 “Captives by State, 2020-2021,” Insurance Information Institute, https://www.iii.org/publications/a-firmfoundation-how-insurance-supports-the-economy/a-50-state-commitment/captives-by-state.

186 A larger number of captive insurers write P&C insurance that is subject to the Program, but do not issue terrorism 

risk insurance subject to TRIP to their policyholders; those captive insurers are not required to report in the TRIP 

data call. See also Marsh Comments, 14 (of 1,500 captive insurers for whom Marsh provides management services 

only about 205 issue policies in one or more TRIP-eligible lines of insurance). There are also large numbers of 

captive insurers in non-U.S. jurisdictions, as the total number of captive insurers worldwide (including U.S. captive 

insurers) is now estimated to be over 7,000. See “Captive Insurance Companies,” NAIC, 

https://content.naic.org/cipr_topics/topic_captive_insurance_companies.htm. Non-U.S. captive insurers are unable 

to participate in TRIP unless they have been licensed by one or more state insurance departments to write insurance 

in one or more U.S. jurisdictions (or have otherwise qualified as an alien surplus lines insurer). Based on the 2022

TRIP data call, only two non-U.S. captive insurersreported information to Treasury as captive insurerslicensed in a 

particular state jurisdiction.
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proximity to critical infrastructure.187 The formation of a captive insurer may provide certain tax 

advantages to a business entity, as compared to an entity that self-insures its risks by simply 

putting aside funds to pay anticipated losses and claims.

188

Captive insurers typically have premium writings (upon which Program deductible calculations 

are based) that are small, relative to other insurer categories. As a result, captive insurers may be 

able to claim Program reimbursement subject to low thresholds (in terms of absolute dollars), 

assuming that overall losses from one or more certified acts of terrorism in a given calendar year 

are sufficient to trigger the Program.189 Given their size, however, captive insurers could be in a 

position in which they could sustain significant losses above their TRIP deductible that would 

not trigger reimbursement under TRIP in light of the Program Trigger.190

Captive insurers tend to insure similar TRIP exposures as other insurers generally—property, 

liability, payroll (workers’ compensation), and mixed. The most significant difference in 

exposures between captives and alien surplus lines insurers is the lack of substantial participation

by alien surplus lines insurers in the market for workers’ compensation insurance. Because 

captive insurers are typically unable, as a matter of state law, to directly provide workers’ 

compensation insurance, most of the workers’ compensation insurance issued by captive insurers 

is in the form of workers’ compensation deductible reimbursement policies, which reimburse 

their policyholders for some portion of the deductibles existing under policies issued to the 

187 See VCIA Comments, 2; SIIA Comments, 1-2; Marsh Comments, 15; GAO, Terrorism Insurance: Status of 

Efforts by Policyholders to Obtain Coverage (2008), 9, 14-16, http://www.gao.gov/assets/290/280918.pdf.

188 The totality of the tax implications of an insurance arrangement, including self-insurance arrangements, depends 

upon the specific circumstances presented. In certain cases, however, an insurer with relatively small amounts of 

total gross receipts or premiums may qualify for favorable tax treatment. A stock insurance company (other than a 

life insurance company) with gross receipts of $600,000 or less (of which more than 50 percent are premiums) is a 

tax-exempt corporation. A mutual non-life insurance company with gross receipts of $150,000 or less (of which 

more than 35 percent are premiums) is also tax-exempt. 26 U.S.C. § 501(c)(15). A non-life insurance company that 

meets certain diversification requirements regarding policyholders or ownership interests, with annual net written 

premiums (or, if greater, direct written premiums) of $2.45 million or less in a taxable year beginning in 2022 ($2.4 

million for a taxable year beginning in 2021, $2.35 million in 2020, and $2.3 million in 2019) may elect to be taxed 

only on its taxable net investment income, as defined in 26 U.S.C. § 834. 26 U.S.C. § 831(b). This premium 

threshold is subject to an annual inflation adjustment. 26 U.S.C. § 831(b)(2)(E). Information reported to Treasury 

during the 2022 TRIP data call(consistent with prior data calls), however, reflects that about 98 percent of captive 

insurers, by DEP, are ineligible to elect favorable treatment under 26 U.S.C. § 831(b) because they received 

premiums in excess of the then-specified premium threshold amount. Accordingly, Treasury’s analysis of captive 

insurers under the Program is mostly based upon data from captive insurers that are taxed on their full income, 

including both underwriting and investment income.

189 Treasury’s modeled loss questions have demonstrated proportionally higher payments to captive insurers than to 

other insurer categories. See Section V.G. Commenters, as well as the ACRSM, have questioned whether the 

existing Program mechanics result in an appropriate level of risk sharing where captive insurers are involved. See

CBI NBCR Comments, 3-5; CBI Cyber Comments, 4-6; Section IX (summary of ACRSM Report). Treasury 

retains the ability to address the participation of captive insurers in the Program (see TRIA § 103(f)) and will 

continue to consider these issues in connection with its specific rulemaking authority in this area as it evaluates the 

available data.

190 See FIO, 2017 Small Insurer Report, 21-23. Although the 2017 Small Insurer Report focused upon the impact of 

the Program Trigger upon small insurers, almost all captive insurers are potentially presented with the same risk.
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captive insurer’s parent by conventional commercial insurance companies.

191

 Figure 53 shows 

the relative breakdown of TRIP exposures in 2021.

Figure 53: 2021 DEP in TRIP-Eligible Lines (by Insurer Category)

Source: 2022 TRIP data call

Treasury modified the 2022 TRIP data call to request more detailed information from captive 

insurers concerning the prevalence of deductible reimbursement policies issued by captive 

insurers in all TRIP-eligible lines of insurance, and not solely limited to workers’ compensation. 

Figure 54 sets forth the results of the data call for all TRIP-eligible lines policies, by line, issued 

by reporting captives in 2021, for conventional policies, deductible reimbursement policies, and 

then the percentage of deductible reimbursement policies by DEP within each line.

191 The 2022 TRIP data call showed that approximately 97percent of the workers’ compensation premium reported 

by captive insurers was in connection with workers’ compensation deductible reimbursement policies.
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Figure 54: 2021 Captive Insurer DEP in TRIP-Eligible Lines 

DEP Conventional 

Policies

($ millions)

DEP Deductible 

Reimbursement

Policies

($ millions)

DEP Deductible 

Reimbursement

Policies

(% of line total)

Aircraft (all perils) $ 207.7 $ 0.3 0.1%

Allied Lines 780.7 65.8 7.8%

Boiler and Machinery 1.4 0.5 27.6%

Commercial Multiple Peril (liability) 362.8 147.9 29.0%

Commercial Multiple Peril (non-liability) 390.2 20.6 5.0%

Excess Workers' Compensation 29.6 NA 0.0%

Fire 1,220.1 68.4 5.3%

Inland Marine 21.7 6.6 23.4%

Ocean Marine 32.8 - 0.0%

Other Liability 5,117.4 775.8 13.2%

Products Liability 633.4 35.2 5.3%

Workers' Compensation 140.2 4,300.1 96.8%

Total TRIP Eligible $ 8,938.1 $ 5,421.2 37.8%

Source: 2022 TRIP Data Call

Based upon the reported data, captives do not appear to be used predominantly to reimburse the 

deductibles imposed on the policyholder by conventional insurers except in the case of workers’ 

compensation, which as noted above is driven by state law requirements.

Treasury also requested more detailed information from captive insurers concerning the extent of 

their assumption of NBCR risk exposures. As noted above, captives (like other insurer 

categories) do not exclude all NBCR risk exposures from all policies. In the 2022 TRIP data 

call, Treasury requested information on limits extended by captive insurers that only insure 

NBCR risks. On a percentage basis, about 12 percent of the captive insurer property limits only 

insure NBCR risk; for liability limits, that figure is only about 1.5 percent.

Captive insurers underwrite risks in all policyholder industry sectors, based upon their responses 

to the TRIP data calls classifying the business operations of their principal (owner) policyholder. 

Figure 55 reflects the distribution of policyholder industry categories within the insurance 

written by captive insurers that is subject to the Program.
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Figure 55: Captive Insurer TRIP-Eligible Lines DEP

by Policyholder Industry Sectors 

Source: 2020-2022 TRIP data calls
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The property exposures written by captive insurers subject to the Program are somewhat more 

concentrated in the larger metropolitan areas than is the case for non-small and alien surplus 

lines insurers, as shown in Figure 56.

Figure 56: Percentage of Total Property Limits within Metropolitan Areas for

Captive Insurers Versus Non-Small and Alien Surplus Lines Insurers

Source: 2020-2022 TRIP data calls

In the 2020 TRIP data call, approximately 29 percent of captive insurers reported purchasing 

reinsurance that would cover an act of terrorism certified under TRIA; in the 2021 TRIP data call 

that figure dropped to 24 percent, and in the 2022 TRIP data it dropped further to 21 percent. 

The data also indicates, however, that captive insurers in the aggregate are obtaining reinsurance 

coverage for a greater proportion of their insurance risks than is the case for other insurer 

categories.

Captive insurers, as compared to other types of insurers, may be better able to purchase 

reinsurance coverage for terrorism risk. This is because conventional commercial insurers will 

generally have business to reinsure that will present a much broader range of exposures (in terms 

of type and locations), with the associated aggregation risks presented, than a captive insurer. By 

contrast, captive insurers write the range of risk exposures presented by their policyholder 

owners, which will usually be more limited and defined than the portfolio of risks underwritten 

by a conventional commercial insurer. Figure 57 compares the reinsurance limits for terrorism 

risk insurance subject to the Program against the total direct property and liability limits assumed 

under policies subject to TRIP.
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Figure 57: Reinsurance Obtained Per $1 Million in Direct Policy Limits Subject to TRIP 

(Property and Liability Combined)

Source: 2020-2022 TRIP data calls

C. Alien Surplus Lines Insurers

Alien surplus lines insurers are those non-U.S. insurers that have been qualified to do business in 

the United States through a process administered by the NAIC assessing their financial stability 

and trustworthiness.192 Those insurers appearing on the NAIC’s current Quarterly Listing of 

Alien Surplus Lines Insurers participate in the Program pursuant to TRIA.193 (Like other 

insurers, not all insurance written by alien surplus lines insurers is in the TRIP-eligible lines of 

insurance.) The companies on the Quarterly Listing fall into two general categories: 

(1) insurance syndicates operating at Lloyd’s of London and (2) insurance companies domiciled 

in various non-U.S. jurisdictions (principally European countries and non-U.S. jurisdictions in 

North America). Industry sources report that Lloyd’s accounts for approximately 69 percent of 

the alien surplus lines DEP in the United States, while individual companies comprise the 

balance of 31 percent.194

The TRIP data calls do not permit an exact evaluation of the participation of alien surplus lines 

insurers within the Program because of the Program data collection mechanics and the manner in 

which many such entities participate within TRIP. Many alien surplus lines insurers (Lloyd’s 

syndicates as well as individual companies) are affiliated with U.S.-based insurance groups. 

Treasury collects data for the Program by insurer group because TRIP operates for most 

purposes on a group basis—i.e., insurer groups submit claims on a group basis, and the 

192 See NAIC, Quarterly Listing of Alien Surplus Lines Insurers(January 2022),

https://content.naic.org/sites/default/files/publications-quarterly-listing-aliens-OLS-AS-234.pdf.

193 See TRIA § 102(6); 31 C.F.R. § 50.4(o)(1)(i)(B) (2021).

194 See A.M. Best, Expanded Opportunities Boost Surplus Lines Growth and Spur Improved Operating Profits

(September 16, 2021), 5, available through https://news.ambest.com/presscontent.aspx?refnum=31157&altsrc=9

(citing 2020 data).
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deductible that must be satisfied is calculated by reference to the TRIP-eligible lines DEP of the 

group as a whole. As a result, some of the experience of alien surplus lines insurers participating 

in the Program is incorporated within the data reported by non-small and small insurers. Given 

the size of the premium writings of alien surplus lines insurers, this does not have a significant 

impact on the reported results for non-small and small insurers. It does, however, potentially 

affect the ability to analyze the entire population of alien surplus lines insurers.

Most of the experience reflected by the reporting of alien surplus lines insurers is set forth above, 

in the relevant sections of the Report. For purposes of premium, however, Treasury collects 

information from alien surplus lines insurers based upon a different array of insurance lines that 

such insurers typically use in connection with their other operations. Figure 58 illustrates 

charges by alien surplus lines insurers for terrorism risk insurance coverage, by the lines used for 

alien surplus lines reporting.195

195 Only a very small amount of terrorism risk insurance is provided by alien surplus lines insurers for no additional 

charge.
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Figure 58: Terrorism Risk Insurance Premiums as a Percentage of Total Policy DEP

when a Premium is Charged by Alien Surplus Lines Insurers (by Line of Insurance)

Source: 2020-2022 TRIP data calls

The information reported by unaffiliated alien surplus insurers reflects a higher percentage 

charge for terrorism risk insurance than has been reported by admitted insurers. That differential 

is to be expected since these insurers write on a surplus lines basis, which responds in large part 

to risks that may be more difficult to insure, and which cannot be placed in the admitted market.
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VII. WORKERS’ COMPENSATION

Workers’ compensation insurance is a product offered by insurers to employers that covers costs 

related to medical care and treatment, rehabilitation, loss of wages, and other financial hardships 

encountered by workers resulting from workplace injuries. Workers’ compensation is a 

TRIP-eligible line of insurance and thus is covered under the Program. Every state, with the 

exception of Texas, requires employers to possess some form of workers’ compensation 

insurance to cover injured employees.

196 Self-insurance of workers’ compensation exposures is 

also permitted in most states.197 A qualified self-insurer may obtain excess workers’ 

compensation insurance from a commercial insurance carrier, which will respond to losses above 

certain thresholds, either on an aggregate or individual claimant basis.198 Although state law 

does not generally permit captive insurers to write workers’ compensation insurance, many 

captive insurers issue workers’ compensation deductible reimbursement policies to reimburse 

their policyholders for some portion of the deductible expense under commercial workers’ 

compensation policies issued to the captive insurer’s parent.199

Unlike most lines of insurance, state laws prohibit insurers from excluding coverage for 

terrorism risk, including NBCR risks, under workers’ compensation coverage. Since terrorism 

risk cannot be excluded from a policy, the take-up rate for terrorism coverage is 100 percent as it 

relates to workers’ compensation insurance. Furthermore, payments to employees under 

196 In Texas, an employer (subject to certain exceptions) can decline to purchase workers’ compensation insurance 

entirely (including for loss arising from terrorism), or otherwise qualify as a self-insurer for the exposure. However, 

when a Texas employer elects to remain outside of the workers’ compensation system, it also remains subject to 

common law actions for employment-related injuries. See generally Texas Labor Code, Title 5 (Workers’ 

Compensation), Chapter 401 et seq. In addition, although Wyoming only requires workers’ compensation coverage 

for workers in “extra-hazardous” occupations, most occupations in Wyoming are so designated under the Wyoming 

workers’ compensation laws. See 2021NASI Workers’ Compensation Report, 5 & n.12 (although noting that share 

of workers subject to the compensation system in Wyoming has declined in recent years on account of the decision 

of several large employers not to provide coverage). In most states, mandatory workers’ compensation coverage 

does not apply to self-employed workers or independent contractors. Additionally, in some states, mandatory 

coverage does not extend to some employees in certain sectors, such as farm and domestic workers.

197 Studies (based upon benefits payment history)indicate thatself-insurance constitutes an estimated 25 percent of 

all workers’ compensation. See, e.g., 2021NASI Workers Compensation Report, 23 (based upon 2019 data). 

Although self-insurers are also responsible for terrorism-related workers’ compensation losses, self-insurance 

arrangements that are not accomplished through P&C insurance within the scope of TRIA are not subject to the 

Program.

198 Industry sources describe excess workers’ compensation insurance as “a type of coverage available for risks that 

choose to self-insure the majority of workers’ compensation loss exposures. Two categories of coverages are 

available: specific, which controls loss severity by placing a cap on losses the insured must pay arising out of a 

single occurrence, and aggregate, which addresses loss frequency by providing coverage once a cumulative per 

occurrence loss limit is breached.” “Excess Workers Compensation Insurance,” International Risk Management 

Institute, https://www.irmi.com/term/insurance-definitions/excess-workers-compensation-insurance.

199 See Section VI.B.
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workers’ compensation policies are only limited by the scope of benefits available under state 

law.200

NBCR events present a more pronounced aggregation risk than conventional terrorism claims 

because of the potential for broad-based losses from NBCR events.

201

 An insurer cannot decline 

to write terrorism risk coverage (or the NBCR component of it) in conjunction with workers’ 

compensation coverage, so insurers choosing to write workers’ compensation business must find 

other ways in which to manage the NBCR aggregation risk. For example, industry sources 

indicate that insurers may attempt to avoid writing policies that present substantial accumulation 

of exposures in the same specific location.202 This presents a substantial issue for insurers and 

employers in large metropolitan areas, with large concentrations of employees subject to 

workers’ compensation. Employers seeking coverage in such metropolitan areas who are unable 

to find an insurer in the voluntary market may be forced to seek coverage from the residual 

market, which under state law must provide coverage to all applicants, although such coverage 

usually comes with a relatively high premium.

Workers’ compensation is the largest TRIP-eligible line of insurance by total DEP, as reflected 

in Figure 2. It is also the largest TRIP-eligible line of insurance by the total amount of terrorism 

risk insurance premiums charged by non-small and small insurers, as reflected in Figure 59.

200 See 2021 NASI Workers’ Compensation Report, 7 (noting that private workers’ compensation policies either 

provide coverage for all workers’ compensation benefits, or all benefits subject to a deductible for which the 

policyholder is responsible).

201 Estimates of aggregate loss arising from NBCR events have exceeded amounts well in excess of the $100 billion 

aggregate limit provided for under TRIP. See, e.g., ACRSM Report, 24 (noting RMS maximum modeled losses for 

nuclear, biological, chemical, and radiological terrorism events ranging as high as $625 billion).

202 See Testimony of Tarique Nageer, Marsh & McLennan Companies, before the Senate Banking, Housing, and 

Urban Affairs Committee (June 18, 2019), 10, 

https://www.banking.senate.gov/imo/media/doc/Nageer%20Testimony%206-18-19.pdf(“Organizations with a large 

concentration of employees are the most likely to be affected. In addition to potential price increases, they also face 

the possibility that their insurers will decline to renew their coverage. The issue of employee aggregation affects 

any employer with a large number of employees at a single location or campus, as is common among financial 

institutions, hospitals, defense contractors, higher education institutions, hotels, professional services companies, 

and nuclear power companies.”); Testimony of Director Chlora Lindley-Myers, Missouri Department of Commerce 

and Insurance, on behalf of the NAIC, before the House Financial Services Committee, Subcommittee on Housing, 

Community Development, and Insurance (October 16, 2019), 2-3, 

https://financialservices.house.gov/uploadedfiles/hhrg-116-ba04-wstate-lindley-myersc-20191016.pdf (“Without 

TRIA, workers’ compensation insurers might raise prices or decline to write coverage for businesses with many 

employees concentrated in single locations or near iconic properties.”).
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Figure 59: Terrorism Risk Insurance Premiums by TRIP-Eligible Line of Insurance

(Non-Small and Small Insurers) ($ millions)

Source: 2020-2022 TRIP data calls

The proportional premiums charged for terrorism risk insurance in the workers’ compensation 

line in 2021 vary by jurisdiction, from a high of 16.7 percent of total premiums when a charge is 

made in the District of Columbia, to a low of 0.4 percent in Montana.

203

 Figure 60 illustrates the 

charges (as a percent of DEP) on a state-by-state basis across the country in 2021.

203 In three jurisdictions where all workers’ compensation insurance is provided by a state entity (North Dakota, 

Ohio, and Washington), no additional charge is made for the terrorism risk portion of the coverage.

2020 TRIP data call 2021 TRIP data call 2022 TRIP data call

2019 

Terrorism 

Risk DEP

% of

2019 Total 

Terrorism 

Risk DEP

2020 

Terrorism 

Risk DEP

% of

2020 Total 

Terrorism 

Risk DEP

2021 

Terrorism 

Risk DEP

% of

2021 Total 

Terrorism 

Risk DEP

Aircraft (all perils) $ 15.6 0.6% $ 14.1 0.5% $ 17.2 0.6%

Allied Lines 122.0 4.5% 117.9 4.3% 108.5 3.5%

Boiler and Machinery 15.6 0.6% 10.7 0.4% 25.5 0.8%

CommercialMulti-Peril 

(liability) 158.0 5.8% 172.8 6.3% 229.4 7.4%

CommercialMulti-Peril (nonliability) 600.5 22.1% 714.3 25.9% 623.2 20.1%

Excess Workers’Comp. 17.4 0.6% 22.1 0.8% 23.1 0.7%

Fire 249.0 9.2% 234.9 8.5% 187.5 6.0%

Inland Marine 78.8 2.9% 91.9 3.3% 100.9 3.3%

Ocean Marine 22.8 0.8% 13.0 0.5% 13.8 0.4%

Other Liability 433.8 16.0% 387.2 14.0% 748.2 24.1%

Products Liability 12.5 0.5% 29.6 1.1% 26.0 0.8%

Workers’Compensation 988.7 36.4% 951.4 34.5% 1,001.0 32.2%

Total $ 2,714.7 100.0% $ 2,759.9 100.0% $ 3,104.3 100.0%
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Figure 60: 2021 Terrorism Risk Insurance Premiums for Workers’ Compensation as a 

Percentage of Total TRIP-Eligible DEP when a Charge is Made

(Non-Small and Small Insurers)

Source: 2022 TRIP data call

Insurance rates for terrorism risk insurance in the workers’ compensation line are based, at least 

in part, upon terrorism catastrophe modeling that estimates the potential impact of terrorist 

attacks upon workers’ compensation insurers.204 In the development of loss costs on a 

state-by-state basis, industry sources report that the impact of the Program is considered.

205 This

shows that, in the absence of the Program, indicated costs—and thus associated premium rates—

would likely be higher than at present.

In sum, the Program constitutes an important feature of the existing market for workers’ 

compensation insurance in the United States, and observers note that there could be disruptions 

to that market in the absence of the Program.206 This is largely on account of the nature of the 

insurance coverage that must be provided as a matter of state law for workers’ compensation 

exposures. Commenters indicated that the market as a whole has been relatively stable.

207

204 NCCI Comments, 3-4.

205 NCCI Comments, 4.

206 Marsh Comments, 4 (“[T]the economic impact from a TRIA non-renewal or notable changes to the trigger, 

deductibles, and co-shares would be particularly challenging for workers’ compensation.”); AM Best Comments, 2

(“Program reauthorization is a particular issue for workers’ compensation capacity. Buyers of this insurance run the 

risk of losing state-mandated coverage if the Program is not reauthorized, given that terrorism coverage cannot be 

excluded from workers’ compensation policies.”).

207 NCCI Comments, 3-4.

Percentage of 

Total DEP

2.0% or more

1.5 to 2.0%

1.0 to 1.5%

0.5 to 1.0%

0.0 to 0.5%

No charge
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VIII. TERRORISM RISK PREMIUMS EARNED OVER TIME

TRIA requires that Treasury provide in each Effectiveness Report an estimate of the total amount 

of premiums earned on terrorism risk insurance since January 1, 2003.208 In the 2020

Effectiveness Report, Treasury determined that as much as $43.2 billion was earned by nonsmall, small, and alien surplus lines insurers between 2003 and 2019, with an additional $8.7

billion earned by captive insurers during this period.209 Based on the information reported for 

2020 and 2021, Treasury now estimates that non-small, small, and alien surplus lines insurers 

have earned approximately $49.7 billion in terrorism risk insurance premiums between 2003 and 

2021, with captive insurers earning an additional $10.0 billion.

A. Non-Small and Small Insurers

Figure 61 provides information on terrorism risk insurance premiums earned by non-small and 

small insurers in 2020 and 2021 and the percentage of total TRIP-eligible DEP represented by 

that figure.

Figure 61: Terrorism Risk Insurance DEP, Non-Small and Small Insurers

2021 TRIP data call 2022 TRIP data call

2020

Terrorism Risk

Insurance DEP

% of Category’s 

2020 TRIPEligible DEP 

2021

Terrorism Risk

Insurance DEP

% of Category’s 

2021 TRIPEligible DEP

Non-Small Insurers $ 2,583,255,551 1.5% $ 2,852,011,364 1.5%

Small Insurers 176,644,263 0.8% 252,263,564 1.0%

Total $ 2,759,899,814 1.4% $ 3,104,274,928 1.5%

Source: 2021 and 2022 TRIP data calls

Figure 61 shows that that non-small and small insurers earned approximately $5.9 billion in 

terrorism risk insurance premiums in 2020 and 2021. Adding in the prior figure of $40.6 billion 

reported in the 2020 Effectiveness Report, small and non-small insurers earned $46.5 billion in 

terrorism risk insurance premiums between 2003 and 2021.

B. Alien Surplus Lines Insurers

Figure 62 provides information on terrorism risk insurance premiums earned by alien surplus 

lines insurers in 2020 and 2021 and the percentage of total TRIP-eligible DEP represented by 

that figure.

208 TRIA § 104(h)(2)(F).

209 FIO, 2020 Effectiveness Report, 77-78 (using reported estimates for the years 2003 through 2017, coupled with 

the data directly reported for 2018and 2019).
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Figure 62: Terrorism Risk Insurance DEP, Alien Surplus Lines Insurers

2021 TRIP data call 2022 TRIP data call

2020

Terrorism Risk 

Insurance DEP

% of Category’s 

2020 TRIPEligible DEP 

2021

Terrorism Risk 

Insurance DEP

% of Category’s 

2021 TRIPEligible DEP

Alien Surplus Lines Insurers $ 267,394,251 2.4% $ 293,742,849 2.4%

Source: 2021 and 2022 TRIP data calls

In 2020 and 2021, alien surplus lines insurers earned approximately $561.1 million in terrorism 

risk insurance premiums. Adding the 2020 and 2021 information received in the TRIP data calls 

to the prior figure of $2.6 billion reported in the 2020 Effectiveness Report, Treasury estimates 

that alien surplus lines insurers earned approximately $3.2 billion in terrorism risk insurance 

premiums between 2003 and 2021.

C. Captive Insurers

Figure 63 provides information on terrorism risk insurance premiums earned by captive insurers 

in 2020 and 2021 and the percentage of total TRIP-eligible DEP represented by that figure.

Figure 63: Terrorism Risk Insurance DEP, Captive Insurers

2021 TRIP data call 2022 TRIP data call

2020

Terrorism Risk

Insurance DEP

% of Category’s 

2020 TRIPEligible DEP 

2021

Terrorism Risk

Insurance DEP

% of Category’s 

2021 TRIPEligible DEP

Captive Insurers $ 638,371,559 6.1% $ 693,955,072 4.8%

Source: 2021 and 2022 TRIP data calls

Captive insurers earned approximately $1.3 billion in terrorism risk insurance premiums in 2020

and 2021. Adding to the prior figure of $8.7 billion reported in the 2020 Effectiveness Report, 

Treasury estimates that captive insurers earned approximately $10.0 billion in terrorism risk 

insurance premiums between 2003 and 2021.

D. Aggregate Industry Totals

As noted above, Treasury estimates that non-small, small, and alien surplus lines insurers, in the 

aggregate, earned as much as $49.7 billion in terrorism risk insurance premiums between 2003 

and 2021, with captive insurers earning an additional $10.0 billion. Based on the information 

provided by the domestic admitted market, this amount constitutes between 1 and 2 percent of 

total TRIP-eligible lines premiums earned over the entire period by these insurers.

Treasury will continue to update these figures in future Effectiveness Reports with the results of 

future TRIP data calls as they are conducted.
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IX. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS

A. Background

The Advisory Committee on Risk-Sharing Mechanisms was created by the 2015 Reauthorization 

Act.210 By statute, the ACRSM is to be made up of directors, officers, or other employees of 

insurance industry participants that participate or desire to participate in nongovernmental risk 

sharing mechanisms for terrorism risk.211 Its role is to provide Treasury with “advice, 

recommendations, and encouragement with respect to the creation and development of . . . 

nongovernmental risk-sharing mechanisms” for terrorism risk.212 After a substantial period of 

work since its formation in 2015, the ACRSM developed a draft report containing initial 

recommendations to Treasury relating to the Program, which the ACRSM adopted as its initial 

Report on May 11, 2020 (the ACRSM Report).

213 Treasury summarized the findings of the 

ACRSM Report, as well as its initial recommendations to Treasury concerning the Program, in 

its 2020 Effectiveness Report.

214

B. Responses to ACRSM Report Recommendations

FIO has taken a number of steps in response to the 2020 recommendations of the ACRSM.

First, Treasury engaged in a procurement to obtain a terrorism risk insurance model.

215

 Treasury 

expects that the future deployment of this model will allow it to perform its own evaluations of 

both the likely impact of acts of terrorism at particular locations, as well as the likely financial 

impact of such acts to the federal government under TRIA. With this information Treasury also 

will be in a better position to evaluate methodologies to support the movement of terrorism risk 

from the federal government to the private market. 

Second, Treasury published a notice for comments in November 2020, in which it sought 

comments from the public concerning a number of issues identified in the ACRSM Report.

216

 

The topics identified in the notice for comments included cyber risk issues under TRIA, the 

certification process, and the participation of captive insurers in the Program. Treasury has been 

210 2015 Reauthorization Act, § 110.

211 2015 Reauthorization Act, § 110(b)(3).

212 2015 Reauthorization Act, § 110(b)(2).

213 The activities of the ACRSM from its formation in 2015 until the recommendations in its May 2020 Report were 

detailed in FIOs most recent Effectiveness Report. See FIO, 2020 Effectiveness Report, 79. See also Report of the 

Advisory Committee on Risk-Sharing Mechanisms (2020), https://home.treasury.gov/system/files/311/5-20-

ACRSM-Report-Final.pdf .

214 FIO, 2020 Effectiveness Report, 79-81.

215 See generally Contract 2032H321C00036, TRIP Terrorism Risk Modeling, Federal Procurement Data System, 

https://www.fpds.gov/ezsearch/search.do?indexName=awardfull&templateName=1.5.2&s=FPDS.GOV&q=2032H3

21C00036.

216 Terrorism Risk Insurance Program; Updated Regulations in Light of the Terrorism Risk Insurance Program 

Reauthorization Act of 2019, and for Other Purposes, 85 Fed. Reg. 71588 (November 10, 2020).
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evaluating the comments concerning all of these issues as it continues to consider potential 

additional actions in response to the ACRSM’s recommendations.

Third, Treasury modified its annual TRIP data call to obtain more detail concerning cyber risk 

insurance, as well as concerning the participation of captive insurers in the Program.217 This 

additional information informs certain of the areas identified by the ACRSM, and the initial 

results of this expansion of the data call have been discussed above in this Report.

218

Fourth, Treasury has engaged with stakeholders in the areas of captive insurers and the ability of 

non-profits to access terrorism risk insurance, which has informed its understanding in these 

areas.

Treasury will be continuing to engage with the ACRSM and stakeholders in the future regarding 

the issues identified by the ACRSM and continue to report on these matters in future 

Effectiveness Reports.

217 See above at Section IV.A.

218 See above at Section V.I (cyber), Section VI.B (captive insurers).
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X. CONCLUSION

The 2019 Reauthorization Act extended the Program for an additional seven years until 2027, 

continuing the Program structure in place as of 2020. Treasury’s evaluation of the relevant data 

concerning the Program indicates—consistent with the views expressed by a large number of 

market participants—that TRIP continues to help make terrorism risk insurance available and 

affordable in the United States, and that the market for terrorism risk insurance has been 

relatively stable for some time since the enactment of TRIA. Commenters have contrasted the

benefits of TRIP with other areas of risk where no federal support is available in the face of 

significant market disruptions. While the Program does not mandate the purchase of terrorism 

risk insurance, a significant proportion of commercial policyholders nationwide have elected to 

obtain such insurance, and take-up may be even higher in metropolitan areas. The Program is 

not limited to such metropolitan areas (where terrorism risk is perceived to be most substantial). 

Indeed, the majority of the risks covered by disclosed policy limits are outside the largest 

metropolitan areas in the United States.

Commercial reinsurance of terrorism risk has significantly increased since the inception of the 

Program. There is now increased reinsurance capacity for those exposures that remain wholly 

with the private market under TRIP. Nonetheless, commercial reinsurance capacity does not 

exist for all exposures currently covered by the Program, as is reflected in the continued limited 

amount of reinsurance available for NBCR events, which pose the greatest risk of causing 

catastrophic industry losses on a broad scale.

The analysis in this Report is based principally on industry data received by Treasury from 

insurers. Treasury, through FIO, will continue to evaluate and analyze whether the Program is 

meeting its objectives. Changed circumstances and continued market developments must be 

assessed over time to make certain that the Program, established in the wake of the September 11 

attacks, remains appropriately tailored to efficiently support terrorism risk insurance markets. In 

particular, recent developments in the cyber insurance market, coupled with changes in the 

nature of cyber risk since the enactment of TRIA, highlight that further evaluation in this area is 

necessary. Treasury will also continue to evaluate and address the other areas that have been 

identified by the ACRSM and other stakeholders.
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APPENDIX 1: 2021 TAKE-UP RATES BY STATE

This table sets forth numerically the 2021 take-up rates, based upon DEP (presented graphically 

in Figure 20 by state for small and non-small insurers combined). It provides the separate 

experience of small and non-small insurers, and then provides the combined figure as well. 

Workers’ compensation is not included within these figures, although excess workers’ 

compensation is included.

Non-Small Insurers Small Insurers Combined

Alabama 61% 66% 62%

Alaska 51% 56% 51%

Arizona 64% 64% 64%

Arkansas 66% 67% 66%

California 57% 43% 56%

Colorado 60% 52% 59%

Connecticut 65% 70% 66%

Delaware 64% 78% 66%

District of Columbia 62% 75% 63%

Florida 50% 30% 47%

Georgia 63% 64% 64%

Hawaii 54% 75% 57%

Idaho 63% 53% 61%

Illinois 63% 70% 63%

Indiana 63% 81% 65%

Iowa 68% 71% 68%

Kansas 64% 54% 63%

Kentucky 68% 60% 67%

Louisiana 49% 41% 48%

Maine 67% 87% 71%

Maryland 68% 77% 69%

Massachusetts 62% 78% 63%

Michigan 65% 80% 68%

Minnesota 63% 61% 63%

Mississippi 62% 69% 63%

Missouri 65% 75% 66%

Montana 62% 60% 62%

Nebraska 64% 62% 64%

Nevada 62% 53% 62%

New Hampshire 65% 85% 68%

New Jersey 64% 64% 64%

New Mexico 69% 55% 68%

New York 61% 59% 60%

North Carolina 69% 74% 69%

North Dakota 58% 62% 59%

Ohio 69% 69% 69%
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Non-Small Insurers Small Insurers Combined

Oklahoma 62% 53% 61%

Oregon 61% 59% 61%

Pennsylvania 68% 71% 68%

Rhode Island 69% 68% 69%

South Carolina 64% 66% 64%

South Dakota 56% 67% 57%

Tennessee 68% 65% 68%

Texas 54% 54% 54%

Utah 65% 49% 64%

Vermont 58% 91% 65%

Virginia 66% 77% 67%

Washington 61% 56% 61%

West Virginia 76% 60% 75%

Wisconsin 66% 74% 67%

Wyoming 63% 60% 62%

Source: 2022 TRIP data call
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APPENDIX 2: 2021 TAKE-UP RATES BY STATE AND LINE GROUPS

This table contains more detailed take-up information for small and non-small insurers, by state 

and by groups of TRIP-eligible lines of insurance. In order to streamline the presentation, and 

provide information by more general categories of information, Treasury displays the 

information by the following categories: (1) Property Insurance; and (2) Liability Insurance. 219 

Evaluation of Appendix 2 permits identification of differences in take-up, on a state-by-state 

basis, as between small insurers and non-small insurers, by the more general coverage categories 

identified.

Non-Small Small Combined

Property Liability Property Liability Property Liability

Alabama 66% 56% 60% 79% 65% 59%

Alaska 65% 46% 61% 57% 65% 47%

Arizona 75% 57% 66% 68% 74% 58%

Arkansas 73% 59% 73% 64% 73% 60%

California 69% 52% 47% 46% 67% 52%

Colorado 68% 55% 53% 54% 67% 55%

Connecticut 76% 62% 81% 64% 76% 62%

Delaware 74% 62% 72% 83% 73% 64%

District of Columbia 81% 54% 82% 70% 81% 55%

Florida 45% 54% 17% 52% 38% 54%

Georgia 74% 56% 76% 60% 74% 56%

Hawaii 58% 52% 85% 73% 63% 55%

Idaho 72% 59% 25% 66% 66% 60%

Illinois 72% 57% 75% 71% 73% 59%

Indiana 66% 60% 81% 82% 68% 63%

Iowa 76% 59% 76% 80% 76% 62%

Kansas 69% 57% 56% 55% 68% 57%

Kentucky 71% 64% 56% 76% 70% 65%

Louisiana 50% 50% 42% 46% 49% 49%

Maine 75% 64% 92% 92% 78% 69%

Maryland 77% 65% 83% 79% 78% 66%

Massachusetts 71% 58% 88% 71% 74% 59%

Michigan 68% 63% 83% 76% 72% 64%

Minnesota 69% 58% 61% 64% 68% 59%

Mississippi 67% 60% 70% 73% 67% 62%

Missouri 73% 57% 76% 79% 74% 60%

Montana 69% 57% 64% 58% 68% 57%

Nebraska 70% 58% 63% 62% 69% 59%

Nevada 70% 57% 48% 58% 69% 57%

219 “Property Insurance” includes Fire, Allied Lines, Boiler & Machinery, and Commercial Multi-Peril (Property) 

combined. “Liability Insurance” includes Commercial Multi-Peril (Liability), Products Liability, and Other 

Liability combined.
Report on the Effectiveness of the Terrorism Risk Insurance Program (June 2022)

______________________________________________________________________________

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY

98

Non-Small Small Combined

Property Liability Property Liability Property Liability

New Hampshire 71% 61% 86% 88% 74% 64%

New Jersey 71% 62% 76% 59% 72% 62%

New Mexico 74% 66% 70% 48% 74% 63%

New York 74% 57% 77% 51% 75% 56%

North Carolina 78% 62% 78% 76% 78% 64%

North Dakota 66% 50% 63% 66% 65% 53%

Ohio 76% 63% 69% 74% 76% 63%

Oklahoma 66% 57% 62% 41% 65% 55%

Oregon 71% 57% 59% 62% 70% 57%

Pennsylvania 77% 63% 73% 72% 76% 64%

Rhode Island 77% 66% 75% 67% 77% 66%

South Carolina 67% 61% 65% 70% 66% 63%

South Dakota 59% 51% 73% 69% 61% 53%

Tennessee 76% 63% 65% 71% 75% 64%

Texas 58% 51% 43% 53% 56% 51%

Utah 74% 62% 52% 51% 73% 61%

Vermont 65% 52% 95% 87% 72% 58%

Virginia 78% 61% 85% 78% 79% 62%

Washington 70% 58% 62% 61% 69% 58%

West Virginia 79% 75% 61% 61% 77% 74%

Wisconsin 75% 59% 75% 73% 75% 61%

Wyoming 68% 57% 71% 53% 68% 57%

Source: 2022TRIP data call