Study of Small Insurer Competitiveness in the Terrorism Risk 

Insurance Marketplace

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY

JUNE 2023
 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Table of Contents 

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

II. BACKGROUND ................................................................................................................... 4 

III. TERRORISM RISK INSURANCE PROGRAM .............................................................. 5 

IV. DATA COLLECTION....................................................................................................... 10 

A. Data Collection Process................................................................................................ 10 

B. Responding Insurer Categories..................................................................................... 11 

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

D. Data Quality Evaluation................................................................................................ 12 

V. 2023 STUDY OF SMALL INSURER COMPETITIVENESS IN THE TERRORISM 

RISK INSURANCE MARKETPLACE ................................................................................... 15 

A. Analysis of Changes to Market Share, Premium Volume, and Policyholder Surplus.. 15 

B. Market Differences Between Small Insurers and Larger Insurers in the Terrorism Risk 

Insurance Marketplace and Comparison to Other Perils .............................................. 21 

1. Embedded Policies.................................................................................................... 21 

2. Standalone Terrorism Policies .................................................................................. 30 

3. Cyber Risk ................................................................................................................ 30 

4. Nuclear, Biological, Chemical, and Radiological Risk ............................................ 34 

5. Comparison to Other Perils....................................................................................... 36 

6. Terrorism Risk Insurance for Places of Worship...................................................... 37 

C. Mandatory Availability Requirement ........................................................................... 40 

D. Effect of the Program Trigger on Small Insurers ......................................................... 42 

E. Availability and Cost of Commercial Reinsurance for Small Insurers ........................ 43 

F. Terrorism Risk Insurance Catastrophe Modeling......................................................... 47 

1. Use of Terrorism Risk Modeling to Evaluate Likelihood of Other Losses Satisfying 

the Program Trigger when Considered in Association with Reported Probable 

Maximum Losses ...................................................................................................... 49 

2. Use of Terrorism Risk Modeling to Evaluate Impact of Program Cap in Connection 

with Different Types of Terrorist Attacks................................................................. 51 

G. Impact of State Workers’ Compensation Laws ............................................................ 54 

VI. CONCLUSION ................................................................................................................... 58 

Appendix 1: 2022 Take-Up Rates by State ............................................................................. 60 

Appendix 2: 2022 Take-Up Rates by State and Line Groups.................................................. 62 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Glossary 

2005 Extension Act ......... Terrorism Risk Insurance Extension Act of 2005, Pub. 

L. 109-144, 119 Stat. 2660 

2007 Reauthorization Act ......... Program Reauthorization Act of 2007, Pub. L. 110-160, 

121 Stat. 1839 

2015 Reauthorization Act ......... Terrorism Risk Insurance Program 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 

2017 Small Insurer Study ......... FIO, Study of Small Insurer Competitiveness in the 

Terrorism Risk Insurance Marketplace (June 2017) 

2018 Effectiveness Report ......... FIO, Report on the Overall Effectiveness of the 

Terrorism Risk Insurance Program (June 2018) 

2019 Small Insurer Study ......... FIO, Study of Small Insurer Competitiveness in the 

Terrorism Risk Insurance Marketplace (June 2019) 

2020 Effectiveness Report ......... FIO, Report on the Overall Effectiveness of the 

Terrorism Risk Insurance Program (June 2020) 

2021 Small Insurer Study FIO, Study of Small Insurer Competitiveness in the 

Terrorism Risk Insurance Marketplace (June 2021) 

2022 Effectiveness Report ......... FIO, Report on the Overall Effectiveness of the 

Terrorism Risk Insurance Program (June 2022) 

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

Insurer as listed on the National Association of Insurance 

Commissioners’ Quarterly Listing of Alien Surplus 

Lines Insurers 

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

policyholder owner(s), which is regulated by the 

captive insurance laws of a particular state jurisdiction 

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

Co-Pay Share ......... 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. The co-pay share for 

CY 2022 was 20 percent. 

CY ......... Calendar year 

DEP ......... Direct earned premium 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

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

Insurance also covers other risks 

Federal Share of ......... The percentage of an insurer’s losses that the federal 

Compensation 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. The federal share of 

compensation for CY 2022 was 80 percent. 

FIO ......... Federal Insurance Office 

Insurer Deductible ......... 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 TRIP-eligible DEP in the prior year. 

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

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 CY 

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 

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

terrorism risk 

Study ......... FIO, Study of Small Insurer Competitiveness in the 

Terrorism Risk Insurance Marketplace (June 2023) 

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 Lines of ......... Commercial P&C insurance subject to the TRIP 

Insurance pursuant to 31 C.F.R. § 50.4(w) 

WC ......... Workers’ Compensation 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

I. INTRODUCTION AND EXECUTIVE SUMMARY 

Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (2015 

Reauthorization Act),1 the Secretary of the Treasury (Secretary) is required to conduct a study of 

small insurers participating in the Terrorism Risk Insurance Program (TRIP or Program) and 

identify any competitive challenges small insurers face in the terrorism risk insurance 

marketplace. The study must identify: 

A. changes to the market share, premium volume, and policyholder surplus of small insurers 

relative to large insurers; 

B. how the property and casualty insurance market for terrorism risk differs between small 

and large insurers, and whether such a difference exists within other perils; 

C. the impact of the Program’s mandatory availability requirement on small insurers; 

D. the effect on small insurers of increasing the Program Trigger; 

E. the availability and cost of private reinsurance for small insurers; and 

F. the impact that state workers’ compensation laws have on small insurers and workers’ 

compensation carriers in the terrorism risk insurance marketplace.

2 

The findings and conclusions of the study must be submitted in a report to Congress no later than 

June 30, 2023 (Study).3 

The 2015 Reauthorization Act also requires the Secretary to collect Program data on an annual 

basis.4 The Federal Insurance Office (FIO) assists the Secretary in Program administration.5 

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

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

the 2015 Reauthorization Act), appear in a note of the United States Code (15 U.S.C. § 6701 note), and, therefore, 

references to the provisions of TRIA or the 2015 Reauthorization Act are identified by the sections of the law, e.g., 

“TRIA § 102(1) (definition of an ‘act of terrorism’)”. 

2 TRIA § 108(h). 

3 The 2015 Reauthorization Act required the Secretary to submit a report on the findings and conclusions of the 

small insurer study to Congress no later than June 30, 2017, and every other June 30 thereafter. Treasury published 

a report on its first small insurer study on June 30, 2017. See Federal Insurance Office (FIO), U.S. Department of 

the Treasury (Treasury), Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace 

(2017) (2017 Small Insurer Study), https://www.treasury.gov/initiatives/fio/reports-andnotices/Documents/Study_of_Small_Insurer_Competitiveness_in_the_Terrorism_Risk_Insurance_Marketplace_(Ju 

ne_2017).pdf. Treasury published a report on its second small insurer study on June 30, 2019. See FIO, Study of 

Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (2019) (2019 Small Insurer Study), 

https://home.treasury.gov/system/files/311/2019_TRIP_SmallInsurer_Report.pdf. Treasury published a report on its 

third small insurer study on June 30, 2021. See FIO, Study of Small Insurer Competitiveness in the Terrorism Risk 

Insurance Marketplace (2021) (2021 Small Insurer Study), 

https://home.treasury.gov/system/files/311/2021TRIPSmallInsurerReportJune2021.pdf. This Study addresses 

Treasury’s findings and conclusions from its fourth small insurer study, described further in Section V. 

4 TRIA § 104(h)(1). 

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

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Since the 2015 Reauthorization Act, the U.S. Department of the Treasury (Treasury) has 

conducted eight data calls—a voluntary call in 2016 seeking calendar year (CY) 2015 data, and 

seven mandatory calls in 2017, 2018, 2019, 2020, 2021, 2022, and 2023 requiring, respectively, 

the production of CY 2016, 2017, 2018, 2019, 2020, 2021, and 2022 data. This Study addresses 

the six statutory considerations identified above, and principally uses information from the 2021, 

2022, and 2023 TRIP Data Calls. 

Based on its analysis of the collected information, Treasury has reached the following 

conclusions, all of which are discussed in this Study: 

A. The percentage of small insurer direct earned premium (DEP) in the TRIP-eligible 

lines of insurance has remained relatively constant since Treasury began collecting 

data on a mandatory basis in 2017. Refer to Section V.A. 

B. As noted in prior Small Insurer Studies, numerous market differences exist between 

small insurers and larger (non-small) insurers. Refer to Section V.B. These include: 

1. When insurers charge for terrorism risk insurance coverage, small insurers, on 

average, allocate a lower percentage of DEP for terrorism risk insurance than do 

non-small insurers. Data reported by small insurers in prior data calls reflected 

that they were more likely than non-small insurers to charge no premium for 

terrorism risk insurance. However, the most recent reported information in this 

year’s data call reflects that small and non-small insurers were equally likely to 

assess no additional charge for terrorism risk insurance. Based on the most recent 

reported data, terrorism risk insurance take-up rates by small insurer 

policyholders are slightly lower than the take-up rates for the policyholders of 

non-small insurers. Small insurers also tend to provide coverage in fewer states 

than do non-small insurers, and small insurers earn a higher percentage of DEP in 

the commercial multi-peril (CMP) and workers’ compensation lines than do nonsmall insurers. 

2. Small insurers continue to issue few or no policies for standalone terrorism 

insurance. 

3. Small insurers are participating in the cyber insurance market covered under the 

TRIP-eligible lines of insurance at different premium levels and at different 

terrorism risk insurance take-up rates than other market participants. Small 

insurers have a smaller share of the cyber insurance market as compared to their 

share of the TRIP-eligible lines market generally. However, the most recent 

reported data shows that small insurers have a more significant share of the 

market for cyber insurance issued to small policyholders than they have in most 

other TRIP-eligible lines. 

4. The reported data shows that small insurers exclude coverage for nuclear, 

biological, chemical, and radiological (NBCR) risks from their terrorism risk 

insurance coverage at similar percentages as shown by other industry participants. 

Nonetheless, their reported limits continue to indicate that they may still have a 

significant aggregate exposure associated with such losses. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

5. The market share of small insurers in the lines of insurance covered by TRIP is 

slightly higher than their market share in property and casualty (P&C) insurance 

lines not covered by TRIP. 

6. Small insurers are the largest market provider of terrorism risk insurance for 

places of worship, in an amount significantly exceeding their overall share of the 

terrorism risk insurance market. 

C. The mandatory availability requirement appears to affect small insurer participation 

in the terrorism risk insurance market by causing them to assume more terrorism risk 

exposure than they might otherwise provide absent the requirement. To the extent 

this presents risk to small insurers, the Program’s backstop provisions address some 

of that potential risk. The continuing ability of small insurers to compete in this 

market indicates that the mandatory availability requirement may not be unduly 

limiting their market participation in the TRIP-eligible lines of insurance. Refer to 

Section V.C. 

D. Under some scenarios, individual or multiple small insurers could sustain significant 

terrorism losses without federal backstop support from TRIP if their aggregate losses 

fail to satisfy the Program Trigger. This could have a negative effect on small 

insurers, particularly in the absence of private reinsurance addressing this exposure. 

The data also continues to show that some small insurers do not purchase private 

reinsurance sufficient to cover the potential gap between their individual Program 

deductibles and the Program Trigger, or their estimated Probable Maximum Loss. 

Modeling analysis undertaken by FIO reflects that this risk may be partially 

mitigated, but not eliminated, by the likelihood that the losses incurred by other 

market participants from certified acts of terrorism would satisfy the Program 

Trigger. Refer to Sections V.D, V.F. 

E. Small insurers cede a larger percentage of their DEP to purchase reinsurance than do 

non-small insurers. However, the reported aggregate reinsurance purchases by small 

insurers for terrorism risk as measured by limits have decreased in recent years. In 

addition, small insurers purchase less reinsurance for NBCR-related terrorism risk 

than for conventional terrorism risk. Refer to Section V.E. 

F. Workers’ compensation insurance cannot exclude coverage for either conventional or 

NBCR-related terrorism losses. Therefore, workers’ compensation remains a difficult 

exposure from a terrorism risk standpoint for the insurance market. Small insurers 

face an elevated risk for workers’ compensation losses given that a higher percentage 

of their TRIP-eligible DEP is from workers’ compensation policies (in comparison to 

non-small insurers). The limited availability of NBCR reinsurance further increases 

this risk to small insurers. Refer to Section V.G. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

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 $54 billion of P&C insurance losses, more than 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. 

The Terrorism Risk Insurance Act of 2002 (TRIA) was enacted, 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 the Program, 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 potential financial 

exposure resulting from this required offer of terrorism risk insurance, certain insurance losses 

resulting from an “act of terrorism” (as defined by TRIA and certified as such by the Secretary) 

are eligible for reimbursement through the Program.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. The 

Program has since been reauthorized four times,11 most recently by the 2019 Reauthorization 

Act, which extended the Program through December 31, 2027.12 Changes enacted in Program 

renewals have reduced potential federal exposure to insured losses and increased private market 

exposure, either through reduction in federal government sharing percentages or increases in 

insurer and market retention amounts on account of the increasing industry premium base. 

6 Insured losses shown in 2019 dollars. See Willis Towers Watson, The Terrorism Pool Index: Review of Terrorism 

Insurance Programs in Selected Countries 2022 (2022), 36, https://iftrip.org/wp-content/uploads/2022/06/terrorismpool-index-2022.pdf. 

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. 31 C.F.R. § 50.4(w)(1) (2022). Some 

of these lines also contain personal P&C premium exposures that are not subject to the Program. There are also 

certain other defined exclusions within these lines. See 31 C.F.R. § 50.4(w)(2). 

9 Further details on Program operation are provided in Section III of this Study. 

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 (2005 Extension Act), Pub. L. 109-144, 119 Stat. 2660 

(2005); Terrorism Risk Insurance Program Reauthorization Act of 2007 (2007 Reauthorization Act), Pub. L. 110-

160, 121 Stat. 1839 (2007); 2015 Reauthorization Act; Terrorism Risk Insurance Program Reauthorization Act of 

2019 (2019 Reauthorization Act), Pub. L. 116-94, 133 Stat. 2534 (2019). 

12 Treasury issued rules in June 2021 to implement changes to TRIA under the 2019 Reauthorization Act. See 

Terrorism 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). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

III. TERRORISM RISK INSURANCE PROGRAM 

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

coverage for insured losses resulting from acts of terrorism.13 This offer must “not differ 

materially from the terms, amounts, and other coverage limitations applicable to losses arising 

from events other than acts of terrorism.”14 The “make available” requirement applies only to 

TRIP-eligible lines of insurance.15 TRIA does not mandate that insurers offer terrorism risk 

insurance at a particular price,16 nor does TRIA require any policyholder to purchase insurance 

for terrorism risk.17 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;18 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.19 

13 An insurer is defined under TRIA as any entity, including any affiliate thereof, which receives direct earned 

premiums for 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). 

14 TRIA §103(c)(2). 

15 Reinsurance is excluded from the TRIP-eligible lines of insurance. TRIA § 102(11)(B)(vii). Issues concerning 

the availability of private reinsurance for terrorism risk are discussed further in Sections V.E and V.F. 

16 State insurance rating laws and regulations may affect the price that insurers can charge for terrorism risk 

insurance subject to TRIA. 

17 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 V.G. 

18 TRIA also provides that an act of terrorism may occur 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). 

19 TRIA § 102(1)(A). An “act of terrorism” satisfying the TRIA definition may be certified by the Secretary, 

whether it is committed by domestic or foreign persons. See 2007 Reauthorization Act, § 2 (deleting “acting on 

behalf of any foreign person or foreign interest” from “act of terrorism” definition). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Additionally, the Secretary may not certify an act that results in P&C insurance losses totaling $5 

million or less,20 or that was committed as part of the course of a war declared by Congress.21 

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.22 Treasury must then obtain reimbursement of certain payments of 

the federal share of compensation through a recoupment process, and may require 

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

A participating insurer’s recovery under the Program is based on several factors, including its 

individual insurer deductible, the Program Trigger, the federal share of compensation of an 

insurer’s losses, and the Program Cap. These factors are described in greater detail below. 

Insurer Deductible 

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

an insurer is eligible for Program payments from Treasury: (1) the insurer’s losses must exceed 

its deductible (as defined under the Program); and (2) the Program Trigger must be satisfied. 

TRIA defines an individual insurer’s deductible as 20 percent of the insurer’s DEP in the TRIPeligible lines for the prior calendar year.23 

Program Trigger 

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

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

before Treasury can make any federal payments. Beginning in 2016, the Program Trigger 

increased by $20 million per year, increasing from $100 million in 2015 to $200 million in CY 

2020,24 at which level it will remain for each calendar year until the current expiration of the 

Program in 2027.25 Once the Program Trigger has been satisfied, Treasury will make payments 

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

20 TRIA § 102(1)(B)(ii). 

21 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). 

22 Treasury makes all determinations pursuant to the Program regulations. See 31 C.F.R. Part 50. 

23 TRIA § 102(7). 

24 TRIA § 103(e)(1)(B). 

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

2005 Extension Act. It was initially set at $50 million (for losses occurring in 2006) and increased to $100 million 

for losses occurring in 2007. When TRIP was reauthorized through 2014 in the 2007 Reauthorization Act, no 

change was made to the Program Trigger, which remained at $100 million. The 2015 Reauthorization Act, 

however, provided for an annual increase of $20 million in the Program Trigger beginning in 2016 and continuing 

until 2020, and resulting in a Program Trigger of $200 million in 2020. The 2019 Reauthorization Act did not 

modify the Program Trigger provisions of TRIA, such that the Program Trigger currently remains at $200 million 

through 2027. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

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 

CY 2022, and through the current expiration of the Program, the federal share of compensation is 

80 percent of an insurer’s losses above its deductible, with the insurer responsible for the 

remaining 20 percent.26 

Program Cap 

TRIA limits the aggregate insured loss exposure of both insurers and the federal government 

arising from one or more acts of terrorism. Specifically, TRIA prohibits the Secretary from 

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

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

Program Cap of $100 billion during any calendar year.27 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.28 

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 Treasury29 and the time within which they 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)(A). 

27 TRIA § 103(e)(2)(A). 

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

determine the pro rata share of insured losses to be paid by each affected insurer. TRIA §§ 103(e)(2)-(3). 

29 Treasury must recover amounts—mandatory recoupment—where total industry payments are below the insurance 

marketplace aggregate retention amount, or IMARA, which is calculated annually by Treasury based upon its annual 

TRIP Data Calls and is the annual aggregate average of insurer deductibles over the prior three-year period. See 

TRIA §§ 103(e)(6)-(7); 31 C.F.R. § 50.4(m)(2) (2022). For purposes of CY 2022, the IMARA is $42.7 billion. See 

IMARA Calculation for Calendar Year 2022 Under the Terrorism Risk Insurance Program, 86 Fed. Reg. 73100 

(Dec. 23, 2021). In connection with amounts subject to mandatory recoupment, Treasury must collect 140 percent 

of total amounts expended. See TRIA §§ 103(e)(7)-(8). 

30 TRIA §§ 103(e)(7)-(8). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

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 

Small Insurer Definition 

The 2015 Reauthorization Act directed the Secretary to develop a regulatory definition of “small 

insurers” participating in TRIP for purposes of the biennial small insurer study.

32 Treasury 

regulations define small insurers in direct relation to the Program Trigger: 

Small insurer means an insurer (or an affiliated group of insurers . . .) whose 

policyholder surplus for the immediately preceding year . . . is less than five 

times the Program Trigger amount for the current year and whose direct earned 

premium for the preceding year is also less than five times the Program Trigger 

amount for the current year. An insurer that has not had a full year of 

operations during the immediately preceding calendar year is a small insurer 

if its policyholder surplus in the current year is less than five times the Program 

Trigger amount for the current year. A captive insurer is not a small insurer, 

regardless of the size of its policyholder surplus or direct earned premium.33 

For the purposes of the 2023 TRIP Data Call, small insurers were insurers with both a 2021 

policyholder surplus under $1 billion and a 2021 TRIP-eligible DEP under $1 billion, each of 

which are equal to five times the 2022 Program Trigger of $200 million. 

Significance of the Program Trigger for Small Insurers 

The Program Trigger has no practical impact for insurers above the small insurer size threshold. 

This is because any “non-small” insurer that satisfies its own individual insurer deductible will 

also have sufficient losses to individually meet the Program Trigger. Under the Program, a nonsmall insurer will always be entitled to submit claims for the federal share of compensation once 

it meets its insurer deductible. 

However, the Program Trigger can pose a barrier to recovery of the federal share of 

compensation by small insurers. A small insurer may satisfy its individual insurer deductible, 

but still have total losses that are less than the Program Trigger. For example, if a small insurer 

had a 2022 insurer deductible of $50 million, and experienced $100 million in total insured 

losses due to a certified act of terrorism, the insurer would only be able to receive payment of the 

federal share of compensation if aggregate insured losses among all Program participants 

exceeded the Program Trigger ($200 million in 2022). If this insurer were the only insurer to 

31 Depending on how any federal payments under TRIP compare with the total insured losses paid by participating 

insurers, TRIA provides that recoupment under the Program may be mandatory or may be subject to the Secretary’s 

discretion. In connection with amounts subject to mandatory recoupment, Treasury must collect 140 percent of total 

amounts expended. See TRIA §§ 103(e)(7)-(8). 

32 TRIA § 108(h)(1). Treasury’s small insurer definition should not be viewed as having relevance to any other 

definition of “small insurer” that may be used in other statutory and regulatory determinations, either at the federal 

or state levels. 

33 31 C.F.R. § 50.4(z). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

sustain insured losses in the act of terrorism (or if aggregate industry losses were under $200 

million), the Program Trigger would not be satisfied, and the insurer would not be able to submit 

a claim for the federal share of compensation, despite experiencing significant losses and 

satisfying its individual insurer deductible under the Program. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

IV. DATA COLLECTION 

A. Data Collection Process 

The 2015 Reauthorization Act provides that, beginning in CY 2016, the Secretary shall require 

participating insurers to provide information and data to the Secretary for purposes of analyzing 

the overall effectiveness of the Program.34 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.35 

This Study is based primarily on the results of Treasury’s 2021, 2022, and 2023 TRIP Data Calls 

(i.e., relating to CY 2020, 2021, and 2022, respectively). In addition, Treasury performed 

qualitative research and sought comments from stakeholders and the public through a Federal 

Register Notice.

36 When analyzing certain market changes over time for this Study, Treasury 

also considered information reported by insurers to state regulators. 

The 2021, 2022, and 2023 TRIP Data Calls were mandatory for participating insurers,37 subject 

to an exception for small insurers with less than $10 million in TRIP-eligible lines DEP in any 

individual reporting year.38 

34 TRIA § 104(h)(1). 

35 TRIA §§ 104(h)(1)(A)-(G). 

36 See Comments in Aid of Analyses of the Terrorism Risk Insurance Program, 88 Fed. Reg. 18374 (March 28, 

2023). In response to its notice seeking comments in connection with this Study, Treasury received comments from 

the Centers for Better Insurance (May 9, 2023) (CBI Comments), the National Association of Mutual Insurance 

Companies (May 9, 2023) (NAMIC Comments), and the National Council on Compensation Insurance (May 12, 

2023) (NCCI Comments). The comments are available at https://www.regulations.gov/document/TREAS-TRIP2023-0004-0001/comment. 

37 Insurers that are not small insurers were subject to different reporting templates that requested more data 

elements. 

38 Based on state reporting data, Treasury estimates that the approximately 350 insurers eligible for this reporting 

exception in the 2023 TRIP Data Call constituted 0.3 percent of the TRIP-eligible lines premium market, and 2.8 

percent of the small insurer market segment. These amounts are slightly less than Treasury’s estimates for the prior 

TRIP Data Calls. State reporting data cited in this Study are as of December 31, 2022, as derived from S&P Global 

Market Intelligence (S&P Global) on April 26, 2023. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Treasury collected data on a group basis because TRIP is generally administered on a group 

basis.39 Treasury collected data concerning DEP, policy exposures, policyholder take-up rates, 

and reinsurance. 

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

2015 Reauthorization Act.40 The statistical aggregator provided results to Treasury in an 

aggregated, anonymous format that did not identify any specific reporting groups or individual 

insurers. Treasury obtained most of the workers’ compensation insurance data from the National 

Council on Compensation Insurance (which provided 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. 

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.41 These insurer categories (listed 

below) collectively encompass non-small and small domestic insurers that were “admitted” or 

licensed to write business in at least one U.S. jurisdiction,42 domestic and foreign insurers that 

were permitted as a matter of state law to write U.S. business on a surplus lines basis, and 

captive insurers admitted or licensed to write TRIP-eligible lines of insurance in at least one U.S. 

jurisdiction.

43 

For the 2023 data call, the four insurer categories required to report information were as follows: 

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

insurers) with both 2021 DEP in TRIP-eligible lines of insurance of less than $1 

billion and a 2021 policyholder surplus of less than $1 billion. The small insurer 

threshold is calculated annually in relation to the Program Trigger amount. 

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

lines insurers) with either DEP in TRIP-eligible lines of insurance above the small 

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

insurer.” 31 C.F.R. § 50.4(c)(1). 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 31 C.F.R. § 50.96. Insurer groups may include both domestic 

insurers as well as foreign insurers writing business in the United States on a surplus lines basis. 

40 TRIA § 104(h)(3). Insurance Services Office, Inc. was the data aggregator for the 2021, 2022, and 2023 TRIP 

Data Calls. 

41 Each insurer category was provided with a different reporting template that was tailored to that category. 

42 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,” National Association of Insurance Commissioners (NAIC), 

http://www.naic.org/consumer_glossary.htm. 

43 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. See 31 C.F.R. § 50.4(o)(1)(i)(B). See also “Glossary of 

Insurance Terms,” NAIC. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

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

(3) 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.44 

Captive insurers are explicitly excluded from the regulatory definition of small 

insurers, and therefore were not subject to this Study’s analysis of small insurers. 

(4) Alien Surplus Lines Insurers: Alien surplus lines insurers not affiliated with either 

a non-small or small insurer.45 Alien surplus lines insurers were not subject to this 

Study’s analysis of small insurers (unless affiliated with an admitted small insurer 

group).46 

C. Response Rate 

Treasury estimates that the response rate for admitted insurers in the 2023 TRIP Data Call 

(measured by TRIP-eligible DEP) was at least 99.0 percent for non-small insurers, and at least 

82.7 percent for small insurers.47 

D. Data Quality Evaluation 

This Study analyzes data for CY 2013 through 2022, with particular attention to implications and 

trends based on data from the 2021, 2022, and 2023 TRIP Data Calls.48 In addition, Treasury 

reviewed state reporting data to draw conclusions for the period from CY 2013 through 2015.49 

44 See 31 C.F.R. § 50.4(g). 

45 Alien surplus lines insurers are non-U.S. insurers qualified by state regulators to participate in U.S. insurance 

markets on a surplus lines basis. They are allowed to write insurance for risks that cannot be placed with domestic 

licensed insurers in the admitted market. See 31 C.F.R. § 50.4(o)(1)(i)(B). 

46 Although most alien surplus lines insurers are below the “small insurer” size threshold, the coverages and 

policyholders in the surplus market may differ significantly from risks placed in the admitted market. In addition, 

although admitted small insurers may write insurance in the surplus market, only 11.6 percent of the individual 

insurers within the small insurer class or market segment that reported in the 2023 TRIP Data Call identified as 

surplus lines insurers. 

47 The small insurer response rate may be higher than this figure because the non-responder category likely includes 

some small insurers that were not subject to the data call. Determining the response rate for alien surplus lines and 

captive insurers under TRIP is more difficult to evaluate because those insurers typically do not submit publicly 

available information that Treasury can use to independently assess response rates. Based upon prior evaluations 

and coordination with relevant state insurance regulators, Treasury estimates that the significant majority of alien 

surplus lines and captive insurers participating in the Program responded to the 2023 TRIP Data Call. 

48 Some of the figures reported in this Study relating to the 2021 and 2022 TRIP Data Calls may not be identical to 

similar information previously reported by Treasury because of late-reported or corrected data that was submitted 

after prior report publication. 

49 Treasury performed its first data collection in 2016. However, because it was the first year of data collection 

under the 2015 Reauthorization Act, Treasury made participation in the collection voluntary to reduce the 

imposition of undue burdens on insurers; all subsequent data calls from 2017 have been mandatory. See Request for 

Data and Information, 81 Fed. Reg. 11649 (March 4, 2016). Insurers constituting approximately 41 percent of the 

entire terrorism risk insurance market (by DEP) responded to the 2016 voluntary data call. Because of the limited 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Treasury also compared the results of its 2021, 2022, and 2023 TRIP Data Calls with state 

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

The comparison between the 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. State insurance regulators collect P&C insurance information from insurers licensed in 

their respective jurisdictions, and although the collection has not historically included 

information specific to the terrorism risk insurance component of P&C insurance policies, the 

information collected identifies DEP by lines of insurance. 

The Program relies on state-defined insurance lines and reporting data standards to determine the 

insurance that is subject to the Program, which promotes efficient program administration. It 

also enables Treasury to determine whether the data reported by non-small insurers and small 

insurers under TRIP Data Calls is generally consistent with similar data reported for state 

regulatory purposes. 

The use of the state reporting data in this Study permits analysis of the entire period from 2013 to 

2022.50 However, the nature of the state reporting data results in some variations between the 

state data and the TRIP data collected by Treasury. There are some differences between the 

TRIP-eligible lines of insurance and the same lines when used for state reporting purposes. 

These differences are caused by state reporting lines including certain premium that is not 

subject to the Program.51 Treasury has adjusted the state data to account for the premium 

differential between the TRIP-eligible lines of insurance and the state reporting lines from 2013 

to 2022 by assuming that similar amounts of premium in the state reporting lines were not 

subject to the Program but still reported for state purposes. In addition, the state reporting data 

used in this analysis relates to the TRIP-eligible lines and is not specific to terrorism risk. For 

purposes of this analysis, Treasury considers the data, as adjusted, to be instructive and generally 

consistent with the information generated by the TRIP Data Calls. 

The relationship between the small insurer definition and the Program Trigger also affects the 

analysis of market changes from 2013 to 2022. The Program Trigger has increased each year 

between 2016 and 2020, affecting the number of insurers defined as small insurers in each of 

these years. Specifically, the number of insurers classified as small insurers increased because 

an increasing number of insurers were below the small insurer threshold. Such changes in the 

Program Trigger have the result of increasing the market share of small insurers, assuming all 

response to the 2016 TRIP Data Call, the Study does not compare results from the 2016 voluntary data call to the 

mandatory data calls. For more information about the voluntary 2016 TRIP Data Call, see FIO, Report on the 

Overall Effectiveness of the Terrorism Risk Insurance Program (2016), 7, 

https://www.treasury.gov/initiatives/fio/reports-andnotices/Documents/2016_TRIP_Effectiveness_%20Report_FINAL.pdf. 

50 All reported state data includes data for the District of Columbia in addition to the 50 U.S. states. 

51 The principal differences 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 

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). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

other considerations remain the same. Treasury discussed this factor in its 2017 and 2019 Small 

Insurer Studies.

52 Because the Program Trigger is now fixed at $200 million from 2020 until 

expiration of the Program in 2027, classification of insurers as “small insurers” after 2020 will 

no longer be affected by periodic changes in the amount of the Program Trigger. 

52 See FIO, 2017 Small Insurer Study, 11-12; FIO, 2019 Small Insurer Study, 15. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

V. 2023 STUDY OF SMALL INSURER COMPETITIVENESS IN THE TERRORISM 

RISK INSURANCE MARKETPLACE 

TRIA requires each small insurer study to include an analysis of the following six areas: 

A. Changes to market share, premium volume, and policyholder surplus of small 

insurers relative to large insurers; 

B. How the P&C insurance market for terrorism risk differs between small and large 

insurers and whether such a difference exists within other perils; 

C. The impact of the Program’s mandatory availability requirement on small insurers; 

D. The effect on small insurers of increasing the Program Trigger; 

E. The availability and cost of private reinsurance for small insurers; and 

F. The impact that state workers’ compensation laws have on small insurers and 

workers’ compensation carriers in the terrorism risk insurance marketplace. 

This Study analyzes these areas in subsections A through G below. 

Because of the Program’s structure, changes in the broader P&C insurance market, unrelated 

specifically to terrorism risk, may affect the terrorism risk insurance and reinsurance markets.53 

A. Analysis of Changes to Market Share, Premium Volume, and Policyholder 

Surplus 

Figure 1 sets forth summary information from the 2021, 2022, and 2023 TRIP Data Calls 

concerning the insurer categories participating in TRIP, as indicated by reported TRIP-eligible 

DEP. 

53 See, e.g., Willis Towers Watson, Insurance Marketplace Realities, 2021 Spring Update (April 21, 2021), 61, 

https://www.willistowerswatson.com/en-US/Insights/2021/04/insurance-marketplace-realities-2021-spring-update 

(“Embedded terrorism (TRIA) coverage—coverage included in property and casualty programs—remains inevitably 

and, at the moment, disadvantageously linked to property and casualty market fluctuations.”). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 1: TRIP-Eligible DEP by Insurer Category ($ billions)54 

2021 TRIP Data Call 2022 TRIP Data Call 2023 TRIP Data Call 

2020 DEP in TRIP- % of 2021 DEP in TRIP- % of 2022 DEP in TRIP- % of 

Eligible Lines Total Eligible Lines Total Eligible Lines Total 

Alien Surplus Lines Ins. $ 11.0 5% $ 12.1 5% $ 17.0 6% 

Captive Insurers 10.5 5% 14.4 6% 12.0 4% 

Non-Small Insurers 175.3 80% 186.9 78% 209.2 78% 

Small Insurers 22.2 10% 26.2 11% 31.2 12% 

Total $ 219.0 100% $ 239.6 100% $ 269.3 100% 

Source: 2021-2023 TRIP Data Calls 

Treasury concluded in its 2022 Effectiveness Report that the market for terrorism risk insurance 

in the United States was relatively stable; that such insurance was both available and affordable 

to U.S. policyholders; and that the Program has been effective in promoting the observed market 

stability.55 Although not the focus of this Study, Treasury’s analysis of the 2023 TRIP Data Call 

is consistent with Treasury’s findings in the 2022 Effectiveness Report. Treasury will continue 

to evaluate the market in its next report on the effectiveness of the Program, to be issued in June 

2024. Within the terrorism risk insurance market, small insurers constituted between 10 and 12 

percent of the entire TRIP-eligible lines insurance market between 2020 and 2022. 

This Section examines changes to the market share, premium volume, and policyholder surplus 

of small insurers as compared to large (or non-small) insurers between 2013 and 2022. This 

analysis does not include the market shares of alien surplus lines insurers and captive insurers, 

given the lack of comparable data. Therefore, the current overall market share of small insurers 

when measured only against non-small insurers in this Section is slightly higher than the 10 to 12 

percent figure noted above for the comparison to the entire market. 

Treasury performed multiple analyses to evaluate the changes discussed in this Section. First, 

Treasury examined the market share of small insurers, using the regulatory definition of small 

insurer that directly relates to the Program Trigger. Although the small insurer definition was 

not adopted until 2016, Treasury analyzed 2013-2022 data based on the number of insurers that 

would have been considered small insurers under the Program if the small insurer definition had 

been in effect since 2013.56 Figure 2 uses the state reporting data for the entire 2013-2022 

period, as well as the more specific results from Treasury’s 2017-2023 TRIP Data Calls, arrayed 

next to the corresponding years of state data from those years. 

54 Due to the rounding of numbers for presentational purposes, some totals in the Report do not exactly equal the 

aggregation of the elements. 

55 Federal Insurance Office, U.S. Department of Treasury, Report on the Overall Effectiveness of the Terrorism Risk 

Insurance Program (2022) (2022 Effectiveness Report), 15-17, 

https://home.treasury.gov/system/files/311/2022%20Program%20Effectiveness%20Report%20%28FINAL%29.pdf. 

56 Thus, Treasury’s analysis assumes that small insurers in 2014 and before had less than $500 million in DEP and 

policyholder surplus, because the Program Trigger was $100 million in those years. 

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T T T 

Figure 2: 2013-2022 Market Share by DEP of Small Insurers in TRIP-Eligible Lines based Market Share (%) 

upon Application of Small Insurer Definition in Each Year 

S&P Global TRIP Data Call 

16% 14.6% 14.3% 14.3% 14.2% 

14% 13.2% 13.0% 11.9% 12.8% 12.3% 11.9% 11.7% 11.9% 11.5% 11.7% 12% 11.6% 11.2% 10.7% 

10% 

8% 

6% 

4% 

2% 

0% 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Year 

 

 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: S&P Global and 2017-2023 TRIP Data Calls 

Figure 2 reflects some fluctuation in the market share of small insurers as compared to non-small 

insurers based, in part, upon the change in the number of small insurers in the market during 

each year on account of the application of Treasury’s small insurer definition and changes in the 

Program Trigger. During the 2016-2020 period, the increase in the Program Trigger brought 

more insurers within the small insurer category. To account for how changes in the Program 

Trigger affect the number of small insurers, Treasury applied a fixed small insurer threshold 

between the years 2013 and 2022. This was done by identifying all insurers meeting the 2022 

definition of small insurer—that is, all insurers with less than $1 billion in TRIP-eligible lines 

premium and policyholder surplus. Using this approach, Figure 3 shows the same market share 

analysis from 2013 to 2022, again using both the state reporting data as well as data from the 

TRIP Data Calls. 

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T T T 

Figure 3: 2013-2022 Market Share by DEP of Small Insurers in TRIP-Eligible Lines based Market Share (%) 

upon 2022 Application of Small Insurer Definition 

S&P Global TRIP Data Call 

18% 17.1% 17.1% 17.1% 16.3% 

15.4% 15.2% 16% 14.3% 14.6% 14.3% 14.2% 

14% 13.0% 12.3% 11.6% 11.7% 11.9% 11.7% 11.2% 12% 

10% 

8% 

6% 

4% 

2% 

0% 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Year 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: S&P Global and 2017-2023 TRIP Data Calls 

After accounting for the definitional change in the small insurer threshold, Figure 3 generally 

shows a decrease in small insurer market share earlier in the period, from 2013 through 2016 

(particularly if only the TRIP Data Call information is considered). Since 2017, the share has 

remained relative constant and slightly increased in 2021 and 2022. 

Figure 4 compares the premium volume for TRIP-eligible lines for small insurers and non-small 

insurers from 2013 to 2022. It uses the 2022 small insurer threshold to evaluate the experience 

of small and non-small insurers over time and uses state data for the 2013-2015 period, and the 

TRIP Data Call information for the 2016-2022 period. 

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~ I I ~ ~ ~ ~~ , ~-~1 ■ ■ 

TRIP-Eligible DEP ($ billions) 

Figure 4: 2013-2022 Premium Volume Comparison for TRIP-Eligible Lines 

Small Insurers vs. Non-Small Insurers 

Small Insurer Non-Small Insurer

 $250 $209 

$187 $175 $173 

$200 

$137 $149 $158 $167 $164 

$166 

$150

 $100

 $50 $37 $34 $33 $22 $26 $31 $22 $22 $23 $23

$-

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Year 

 

 

 

 

 

 

 

 

 

 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: S&P Global (2013-2015) and 2017-2023 TRIP Data Calls (2016-2022) 

As shown in Figure 4, small insurer DEP declined prior to 2016, remained relatively constant 

between 2016 and 2020, and grew by approximately 20 percent annually over the past two 

years.57 In comparison, the premium of non-small insurers generally increased during this entire 

period. The result is a gradual market share decline for small insurers until 2016, followed by a 

leveling off until 2020. Small insurer market share has increased slightly in recent years. 

Figure 5 compares policyholder surplus for small insurers and non-small insurers between 2013 

and 2022, again applying the 2022 small insurer threshold for each year. Policyholder surplus is 

an indicator of an insurer’s financial health, and its ability to pay claims and write new 

business.58 

57 After accounting for the change in the data used beginning in 2016, where TRIP Data Call information is used 

instead of adjusted state data. 

58 Policyholder surplus is the measurement of an insurer’s “assets in excess of the liabilities of a company or net 

income above any monies indebted to legal obligation.” “Glossary of Insurance Terms.” The policyholder surplus 

of a P&C insurer is not limited to supporting an insurer’s terrorism insurance exposure; rather, it “backs all property 

and casualty insurance policies in the United States and is subject to depletion in a wide variety of events. For 

example, extreme weather losses could particularly draw capital away from the terrorism insurance market, because 

events such as hurricanes share some characteristics – low frequency and the possibility of catastrophic levels of loss 

– with terrorism risk.” Congressional Research Service, Terrorism Risk Insurance: Overview and Issue Analysis for 

the 116th Congress (2019), 11, https://crsreports.congress.gov/product/pdf/R/R45707. 

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- - - - - - ■ ■ ■ ■ 

Figure 5: 2013-2022 Policyholder Surplus Comparison 

Small Insurers vs. Non-Small Insurers 

Small Insurer Non-Small Insurer 

Policyholder Surplus ($ billions) 

$ 1,200 

$ 1,000 

$ 800 

$ 600 

$ 400 

$ 200

 -

$37 $42 $37 $45 $53 $53 $66 $71 $74 $67 

$676 $700 $706 $737 $689 $689 

$904 

$971 

$1,097 

$1,003

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Year 

 

 

 

 

 

 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: S&P Global 

Between 2013 and 2022, the aggregate policyholder surplus for all small insurers ranged from a 

low of $37 billion in 2013 as well as in 2015, to a high of $74 billion in 2021. The policyholder 

surplus of non-small insurers generally increased from 2013 through 2016 and, after a small 

decrease in the 2017-2018 period, continued to grow from 2019 to 2021. Policyholder surplus of 

both small insurers and non-small insurers declined in 2022, in response to, among other things, 

significant catastrophic loss experience sustained by P&C insurers that year.59 

In summary, in the absence of data specific to terrorism risk insurance from 2013 to 2015, this 

Study’s use of the state-reported TRIP-eligible lines data for the 2013-2015 period serves as a 

proxy for market share information during these years. Based upon this information, the market 

share of small insurers (measured by TRIP-eligible lines premium and adjusting for the small 

insurer size threshold over time) experienced a decline relative to the market share of non-small 

insurers between 2013 and 2016. This decline in market share for small insurers has leveled off 

since 2016. During this 2013-2016 period, the small insurer DEP remained relatively constant, 

while the DEP of non-small insurers increased, leading to the observed decline in small insurer 

market share. Policyholder surplus for small insurers has increased over the last decade for both 

small and non-small insurers (although fluctuating in different years for different groups). 

Nonetheless, from 2013 to 2022, the amount of small insurer policyholder surplus vis-à-vis nonsmall insurer policyholder surplus has not changed significantly (i.e., small insurer policyholder 

surplus was about 5.5 percent of the amount of non-small insurer policyholder surplus in 2013 

and 6.6 percent in 2022). 

59 See “Near $27B Underwriting Loss in 2022 Largest for U.S. P/C Insurers Since 2011,” Business Insurance, 

March 30, 2023, https://www.insurancejournal.com/news/national/2023/03/30/714476.htm. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

B. Market Differences Between Small Insurers and Larger Insurers in the 

Terrorism Risk Insurance Marketplace and Comparison to Other Perils 

Based upon information collected through Treasury’s TRIP Data Calls, this section analyzes 

premiums, take-up rates, geographic scope of writings, and the lines of insurance in which small 

insurers are more heavily concentrated and comprised a larger share of the overall market. 

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

other risks. Approximately 80 percent of the U.S. terrorism risk insurance market (as measured 

by terrorism risk insurance DEP), in any given year, is comprised of such embedded policies. 

The remaining 20 percent of the U.S. terrorism risk insurance market is comprised of policies 

provided on a “standalone” basis, where the policy provides coverage only and specifically for 

terrorism risk. This section separately examines coverage provided on a standalone basis, as 

well as the additional specialized coverage areas of cyber terrorism and terrorism risk insurance 

for NBCR terrorism events. 

1. Embedded Policies 

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

Under the Program, insurers must disclose to policyholders the amount of premium charged for 

embedded terrorism risk insurance.60 The premium can be expressed to the policyholder as a 

percentage of the total premium charged for the policy. Similarly, analyses of terrorism risk 

insurance also typically express the cost of terrorism risk insurance as a percentage of total 

premiums charged. In many cases, terrorism risk insurance is provided at a disclosed premium 

of $0, meaning it is provided by insurers at no additional charge. 

Figure 6 compares the percentage of total policy DEP allocated to terrorism risk by small 

insurers and non-small insurers on a line-by-line basis. This figure excludes P&C policies where 

the insurer did not charge for terrorism risk coverage. Figure 6 shows that when insurers charge 

a premium for terrorism risk insurance, the percentage of the total policy premium relating to 

terrorism risk for small insurers is, overall, slightly less than the percentage charged by large 

insurers. However, small insurers did report larger percentage charges than non-small insurers in 

some TRIP-eligible lines. 

60 See 31 C.F.R. §§ 50.10, 50.12. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ 

Figure 6: 2022 Percentage of Total Policy DEP Allocated to Terrorism Risk 

(by Line of Insurance and Insurer Category) 

Small Insurer Non-Small Insurer 

9.3% Aircraft (all perils) 3.9% 

12.3% Allied Lines 3.0% 

0.8% Boiler and Machinery 3.5% 

1.4% Commercial Multiple Peril (liability) 1.4% 

2.5% Commercial Multiple Peril (non-liability) 3.3% 

ance 

Excess Workers' Compensation 0.6% 

2.6% 

of Insur

Fire 5.2% 

14.7% 

Line

Inland Marine 3.5% 

3.1% 

Ocean Marine 2.5% 

1.3% 

Other Liability 2.4% 

4.1% 

Products Liability 2.1% 

0.9% 

Workers' Compensation 1.1% 

2.2% 

Total 2.0% 

2.5% 

0% 2% 4% 6% 8% 10% 12% 14% 16% 

Percentage of Insurer Category Premium 

 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2023 TRIP Data Call 

Figure 7 identifies, by percentage of total policy DEP for those policies that provide terrorism 

risk insurance, where the coverage was provided for no additional charge. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ 

Figure 7: 2022 Percentage of DEP Where Policies Include Terrorism Coverage 

at No Additional Cost (by Line of Insurance and Insurer Category) 

Small Insurer Non-Small Insurer 

Aircraft (all perils) 66%

49% 

Allied Lines 53%

43% 

Boiler and Machinery 54%

58% 

Commercial Multiple Peril (liability) 42%

24% 

Commercial Multiple Peril (non-liability) 36%

34% 

Excess Workers' Compensation 47%

4% 

Fire 55%

50% 

Inland Marine 69%

68% 

Ocean Marine 1%

22% 

Other Liability 64%

45% 

Products Liability 72%

24% 

Workers' Compensation 14%

19% 

Total 33%

33% 

0% 10% 20% 30% 40% 50% 60% 70% 80% 

Percentage of Insurer Category Premium 

Source: 2023 TRIP Data Call. Line of Insurance 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 7 shows that small insurers are as likely as non-small insurers to charge no premium at all 

for terrorism risk insurance under embedded policies. This information is a change from prior 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

24 

years in which small insurers were slightly more likely to charge no premium at all for terrorism 

risk.

61 

The amounts that insurers charge for terrorism risk coverage vary not only by line of insurance 

but also by geographic area. Figures 8 and 9 present maps illustrating the percentage of total 

premiums charged for terrorism risk by small insurers (Figure 8) and non-small insurers (Figure 

9) in each of the 50 states and the District of Columbia. The percentages in Figures 8 and 9 only 

account for policies in which a charge was made, and do not include those policies in which no 

charge was made. When evaluating the premium that an insurer charges for terrorism risk 

insurance, the available data does not provide any information concerning the nature of the 

particular risks being insured by a given policy or insurer, which will affect the premium being 

charged. 

61 Compare FIO, 2021 Small Insurer Study, 22-25. One commenter has suggested that the Program is apparently 

having a positive impact upon the competitiveness of small insurers in the terrorism risk insurance marketplace 

because small insurers are more likely than other insurer groups to charge a $0 premium for terrorism risk. See CBI 

Comments, 1-3. As the most recent data reflects, however, small insurers are no longer more likely than non-small 

insurers to charge a $0 premium for terrorism risk. 
______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 8: 2022 Percentage of Total Policy DEP Allocated to Terrorism Risk

by Small Insurers (by State) 

Percentage of 

Total DEP 

2% or more 

1.5 to 2% 

1 to 1.5% 

0.5 to 1% 

Under 0.5%

Source: 2023 TRIP Data Call

Figure 9: 2022 Percentage of Total Policy DEP Allocated to Terrorism Risk

by Non-Small Insurers (by State) 

Percentage of 

Total DEP 

2% or more 

1.5 to 2% 

1 to 1.5% 

0.5 to 1% 

Under 0.5%

Source: 2023 TRIP Data Call

Figure 10 compares the take-up rates for terrorism risk insurance issued by small insurers and 

non-small insurers on a line-by-line basis.

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY

 25 
■ ■ 

.-, I 

• I 

I I 

I 

I I 

I 

I I 

I 

I I 

Figure 10: 2022 Terrorism Risk Insurance Take-Up Rates 

(by Line of Insurance and Insurer Category)62 

Small Insurer Non-Small Insurer 

Line of Insurance 

Aircraft (all perils) 

Allied Lines 

Boiler and Machinery 

Commercial Multiple Peril (liability) 

Commercial Multiple Peril (non-liability) 

Excess Workers' Compensation 

Fire 

Inland Marine 

Ocean Marine 

Other Liability 

Products Liability 

Total 61% 

43% 

53% 

46% 

64% 

51% 

82% 

79% 

80% 

81% 

50% 

43% 

55% 

64% 

45% 

22% 

50% 

33% 

100% 

75% 

72% 

72% 

17% 

14% 

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

Percentage of Insurer Category Premium 

Source: 2023 TRIP Data Call 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

When measured by DEP, policyholder take-up rates for policies written by small insurers were 

slightly lower than those of non-small insurers, both within most individual lines and across the 

overall market.

63 

62 As a matter of state law, primary workers’ compensation policies must provide coverage for terrorism risk, and 

thus the effective take-up rate for this line is 100 percent. By contrast, excess workers’ compensation insurance is 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figures 11 and 12 illustrate take-up rates on a state-by-state basis for small insurers and nonsmall insurers, respectively. These figures include policyholder take-up rates for all lines except 

workers’ compensation.64 

Figure 11: 2022 Terrorism Risk Insurance Take-Up Rates 

for Small Insurers (by State) 

Take-Up Rate 

65 to 70% 

60 to 65% 

55 to 60% 

50 to 55% 

Under 50% 

70% or more 

Source: 2023 TRIP Data Call 

purchased by companies that otherwise self-insure for workers’ compensation liability. The excess policy will 

provide coverage in excess of the obligations to the policyholder as defined in the policy. Because state law permits 

excess workers’ compensation insurance to exclude or limit certain risks, the take up rate for terrorism risk 

insurance under excess workers’ compensation insurance can be less than 100 percent (although the self-insured 

policyholder will remain liable for any excluded exposure). See also Section V.G (discussing workers’ 

compensation insurance). 

63 This differs from the 2021 Small Insurer Study, which found that policyholder take-up rates for policies written by 

small insurers were generally higher than those of non-small insurers. However, this is consistent with the 2019 

Study. Compare FIO, 2021 Small Insurer Study, 26-28, with FIO, 2019 Small Insurer Study, 26-27. 

64 Workers’ compensation is not included because policyholders must obtain terrorism risk insurance under such 

policies and the take up rate is thus effectively 100 percent. Excess workers’ compensation is included, however, 

because policyholders can decline terrorism risk insurance in connection with such insurance. See note 62, above. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

27 
Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 12: 2022 Terrorism Risk Insurance Take-Up Rates 

for Non-Small Insurers (by State) 

Take-Up Rate 

65 to 70% 

60 to 65% 

55 to 60% 

50 to 55% 

Under 50% 

70% or more 

Source: 2023 TRIP Data Call 

Appendix 1 to this Study contains a table setting forth the specific 2022 take-up rates presented 

in Figures 11 and 12 by state for both small and non-small insurers. Appendix 2 to this Study 

provides more detailed take-up information for small and non-small insurers, by state and by 

groups of TRIP-eligible lines of insurance. The Appendices provide further detail on how takeup may vary by state, type of insurance, and small versus non-small insurers. 

Figure 13 compares the geographic footprints of small insurers and non-small insurers by 

examining the number of states in which each insurer writes coverage, as measured by DEP. 

Figure 13: 2022 Geographic Scope of DEP (by Insurer Category) 

Small Insurer Non-Small Insurer 

# of 

Groups: 

147 54 20 14 14 11 4 10 18 37 100 

0% 

20% 

40% 

60% 

80% 

100% 

120% 

Market Share (%) 

 

 

■ ■ 

1-5

6-10

11-1516-2021-2526-3031-3536-4041-4546-50

50+ 

Total Number of States Where Insurer Actively Writes TRIP-Eligible DEP 

 

______________________________________________________________________________ 

Source: S&P Global. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ 

I I , 

Figure 14: 2022 Percentage of DEP in the 

CMP and WC Lines (by Insurer Category) 

Small Insurer Non-Small Insurer 

35% 31% 

30% 28%

25% 

25% 

20%

20% 18%

15% 13%

10% 

10% 7% 

5% 

0% 

Percentage of Line 

Commercial Commercial Total Workers' 

Multiple Peril Multiple Peril Commercial Compensation 

(liability) (non-liability) Multiple Peril 

TRIP-Eligible Line of Insurance 

 

 

 

 

 

 

 

 

 

 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 13 demonstrates that small insurers typically insure policyholder risks within a smaller 

geographic footprint than do larger insurers. Small insurers tend to operate on a regional basis in 

a smaller number of states than do non-small insurers, which may result in small insurers having 

a significant presence in individual local markets.

65 

Figure 14 compares the DEP written by small insurers and non-small insurers in selected lines of 

insurance. Specifically, this figure examines TRIP-eligible lines DEP written within the CMP 

and workers’ compensation lines. CMP products provide coverage for multiple lines of 

insurance within a single policy and tend to be marketed towards small- to medium-sized 

businesses.

66 Workers’ compensation insurance, which is discussed in greater detail in Section 

V.G., provides insurance for workplace injury benefits available under state workers’ 

compensation systems. 

So 3 urce: 202 TRIP Data Call 

Figure 14 shows that the TRIP-eligible DEP of small insurers is more heavily concentrated in the 

CMP and workers’ compensation lines of insurance than is the case for non-small insurers. As a 

result, such small insurers have a larger share of the CMP and workers’ compensation lines of 

insurance than they have of other TRIP-eligible lines. 

65 See, e.g., NAMIC Comments, 2 (“If the program were kept in place with the mandatory offer provision, but the 

various levels were increased to a point where small insurers would have to pull out of certain markets due to a fear 

of being unable to access the TRIA program, this would have a negative impact on the broader insurance market in 

those areas. This is because many of these smaller regional carriers play an important role in ensuring there is 

available coverage across lines of insurance.”). 

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

http://www.iii.org/article/understanding-business-owners-policies-bops. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

2. Standalone Terrorism Policies 

Data collected during the 2023 TRIP Data Call reflects other differences between small insurers 

and other insurers participating in TRIP regarding certain types of terrorism risk insurance. 

Standalone policies provide coverage only for terrorism risk, and they are generally used when 

properties or operations present heightened exposure to terrorism risk. 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 “non-certified” standalone 

terrorism policies, which do not meet the terms and conditions of TRIP. Non-certified 

standalone terrorism policies therefore cover terrorism-related losses (as defined in the specific 

policy) regardless of whether the Secretary has certified an act of terrorism under TRIA.67 

Small insurers continued to report no confirmed data reflecting the issuance of standalone 

terrorism risk insurance policies, consistent with the experience of prior TRIP Data Calls. Figure 

15 illustrates that for 2022 such policies continue to be issued in large numbers by other 

categories of insurers. 

Figure 15: 2022 Certified Standalone Policies and Non-Certified Standalone Policies 

(by Policy Count and DEP) 

Certified Standalone Policies Non-Certified Standalone Policies 

# of Average # of Average 

Policies Total DEP Policy Cost Policies Total DEP Policy Cost 

Alien Surplus Lines Insurers 5,299 $ 112,481,789 $ 21,227 3,886 $ 85,339,264 $ 21,961 

Captive Insurers 245 416,322,671 1,699,276 2 52,922,635 26,461,318 

Non-Small Insurers 2,767 92,850,664 33,556 1,534 83,656,399 54,535 

Total 8,311 $ 621,655,124 $ 74,799 5,422 $ 221,918,298 $ 40,929 

Source: 2023 TRIP Data Call 

3. Cyber Risk 

As Treasury has previously observed, “[c]yber insurance has been generally 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 

providing coverage for ‘physical damage that can be caused by cyber attacks, fraud committed 

by misuse of data, any liability arising from data storage,’ and other risks associated with ‘the 

availability, integrity and confidentiality of electronic information.’”68 

67 While “non-certified standalone terrorism” policies can provide broader (beyond the scope of TRIP) coverage in 

certain circumstances, industry participants have noted that “its pricing, along with the constraint of limited 

available aggregate for certain risks, prevent it from serving as a replacement for TRIPRA [the 2015 TRIP 

Reauthorization Act] for many organizations.” Testimony of Tarique Nageer, Terrorism Placement and Advisory 

Leader, Marsh, Before the United States Senate Committee on Banking, Housing, and Urban Affairs The 

Reauthorization of the Terrorism Risk Insurance Program (June 18, 2019), 12, 

https://www.banking.senate.gov/imo/media/doc/Nageer%20Testimony%206-18-19.pdf. 

68 FIO, 2022 Effectiveness Report, 59 (citation omitted). 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Depending on the circumstances, malicious cyber activity could constitute an act of terrorism 

under TRIA. As a result, to the extent cyber insurance is written under a policy that is within the 

TRIP-eligible lines of insurance, the provisions of TRIA apply to such policies just as they do 

regarding losses from other acts of terrorism.

69 

The cyber insurance market remains one of the fastest growing segments of the P&C market, but 

also is still a very small proportion of the overall P&C market.70 The market continues to 

develop and grow, although a significant portion of that growth in recent years has been because 

of premium increases in the coverage that are driven by multiple factors, including adverse 

claims experience and increased demand for the coverage. Prices continue to increase, although 

such increases may have moderated based on the imposition of stricter underwriting controls and 

cybersecurity requirements on policyholders that have reduced claims and improved insurers’ 

profitability.71 

Figure 16 shows the market participation for cyber policies within TRIP-eligible lines.72 

69 See 31 C.F.R. § 50.4(w)(1); Terrorism 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) 

(adopting regulation to codify within the Program Rules Treasury’s prior guidance concerning cyber insurance 

under TRIP). 

70 FIO addressed the state of the cyber insurance market, including the impact of ransomware claims upon the 

market, in its 2022 Effectiveness Report. See FIO, 2022 Effectiveness Report, 62-65. 

71 See, e.g., “Top Cyber Insurers: 2022 Ranking Reveals Sprinters, Market Share Shifts,” Insurance Journal, May 

17, 2023, https://www.insurancejournal.com/news/national/2023/05/17/721092.htm; Fitch, U.S. Cyber Insurance 

Market Update; Sharp Pricing Increases Yield Strong Profit Improvement (May 12, 2023), available through 

https://www.fitchratings.com/research/insurance/us-cyber-insurance-market-update-sharp-pricing-increases-yieldstrong-profit-improvement-12-05-2023. 

72 Most cyber insurance in the United States is written in lines of insurance subject to TRIP. However, cyber 

insurance can be written in a variety of forms and packages that are classed as professional liability insurance, which 

is excluded from the Program by TRIA. Based on the information reported, FIO estimated in 2022 that 

approximately five percent of reported cyber premium is written in lines of insurance not subject to TRIP. See FIO, 

2022 Effectiveness Report, 67-68. However, the 2023 data call, which includes a higher response rate on the cyber 

data, now reflects that this figure is approximately 15 percent. The amount of cyber insurance not subject to TRIP 

could be slightly larger than this percentage because Treasury’s data would not capture cyber insurance premium 

written by insurers not otherwise subject to reporting in the TRIP Data Calls. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ ■ 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 16: 2020-2022 TRIP-Eligible DEP for Cyber Policies 

2020 2021 2022

 5.0 4.69 

TRIP-Eligible DEP ($ billions) 4.5

 4.0

 3.5

 3.0

 2.5

 2.0

 1.5

 1.0

 0.5

-

3.81 

3.55 

3.08 

2.54 2.36 

1.10 

0.83 

0.58 0.45 0.28 0.17 0.18 0.24 0.23 

Alien Surplus Lines 

Insurers 

Captive Insurers Non-Small Insurers 

Insurer Category 

Small Insurers Total 

Source: 2021-2023 TRIP Data Calls 

Figure 16 indicates that small insurers participate in the market for cyber insurance in the TRIPeligible lines of insurance. However, their market share is less than their market share in the 

overall TRIP-eligible lines of insurance, ranging between 5 and 6 percent depending upon the 

year. 

Figure 17 shows the 2020 through 2022 industry percentages for policyholders that obtained 

terrorism risk insurance in connection with purchasing cyber coverage. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ ■ 

Figure 17: 2020-2022 Take-Up Rates for Terrorism Risk Insurance under Cyber Policies 

(by TRIP-Eligible DEP) 

2020 2021 2022 

100% 91% 

28% 

86% 

64% 64% 

56% 

64% 

58% 

85% 

66% 

77% 

52% 

86% 

61% 

77% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90%

Percentage of Category Premium 

Alien Surplus 

Lines Insurers 

Captive 

Insurers 

Non-Small Small Insurers 

Insurers 

Insurer Category 

Total 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2021-2023 TRIP Data Calls 

The terrorism take-up rate in 2021 and 2022 for terrorism risk insurance under cyber policies is 

significantly higher than reported in prior data calls, largely based upon the experience of nonsmall insurers that constitute the largest share of the cyber insurance market. The take-up rate 

for small insurers during the 2020-2022 period has remained relatively constant. 

In 2022, Treasury began seeking more detailed information in the TRIP Data Calls on cyber 

insurance. Among other things, the TRIP Data Call sought information on cyber insurance take 

up by size of policyholder.73 Most insurers participating in the 2023 Data Call reported 

information by size of policyholder, both in terms of number of policies issued and DEP.74 

While the data reflects that small insurers have a smaller share of the cyber insurance market 

than they generally have in the TRIP-eligible lines of insurance (see Figure 16), Figure 18 shows 

that their share of the market for cyber insurance issued to small policyholders is significantly 

higher, no matter how measured. 

73 See FIO, 2022 Effectiveness Report, 66-69 (discussing expanded cyber insurance data call elements and initial 

findings from same). 

74 The policyholder size categories for the TRIP Data Call were the following: small (100 employees or less, or less 

than $10 million in revenue), medium (101-500 employees or $10-$100 million in revenue), and large policyholders 

(more than 500 employees or more than $100 million in revenue). See 2023 Terrorism Risk Insurance Program 

Data Call, 88 Fed. Reg. 18632, 18632 & n.6 (March 29, 2023). Based upon a comparison of total cyber insurance 

premiums reported generally in the 2023 TRIP Data Call versus total cyber insurance premium reported by size of 

policyholders, more than 80 percent of insurers reported the information allocated by policyholder size in the 2023 

TRIP Data Call. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

33 
 

■ ■ 

Figure 18: 2022 Market Share (by Number of Policies and DEP) 

for Cyber Insurance Issued to Small Policyholders

 (by Category of Insurer) 

% Small (by Policy) % Small (by DEP) 

90% 81% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Alien Surplus Captive Insurers Non-Small Small Insurers 

Lines Insurers Insurers 

63% 

26% 

17% 

11% 

2% 0% 0% 

Insurer Category 

Percent of all Cyber Policies Issued to 

Small Policyholders (% of allocated) 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2023 TRIP Data Calls 

The availability and scope of cyber insurance coverage is of critical importance to the U.S. 

economy, and Treasury will continue to evaluate issues related to cyber insurance, both in the 

context of the terrorism risk insurance market and otherwise, in future reports by FIO.75 In 

particular, FIO is undertaking further analysis and engagement on insurance for catastrophic 

cyber incidents, including the ways in which aspects of this issue may converge with or diverge 

from the Program and terrorism risk insurance more broadly. 

4. Nuclear, Biological, Chemical, and Radiological Risk 

TRIA requires participating insurers to offer insurance for terrorism risk on the same basis as 

insurance offered for other perils. Insurers are not required to offer terrorism risk insurance in 

the case of perils for which non-terrorism coverage is generally not provided or is specifically 

excluded.76 Starting with the 2019 TRIP Data Call, Treasury requested information on NBCR 

75 FIO is also engaging with the Department of Homeland Security’s Cybersecurity and Infrastructure Security 

Agency and the White House’s Office of the National Cyber Director in an evaluation of whether a federal 

insurance response for catastrophic cyber risk to U.S. critical infrastructure is warranted and, if so, what form that 

response should be. See generally Potential Federal Insurance Response to Catastrophic Cyber Incidents, 87 Fed. 

Reg. 59161 (Sept. 29, 2022). 

76 See 31 C.F.R. § 50.22(b). 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

34 
______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

coverage provided by insurers in order to determine the extent to which NBCR coverage may be 

available under TRIP-eligible lines policies.77 

 

■ ■ ■ 

I I l l Il l 

Figure 19: 2020-2022 Percentage of Terrorism Risk Insurance Property Limits 

Where NBCR Exposures are not Entirely Excluded 

2020 2021 2022 

100% 

90% 

80% 

70% 63% 64%

Percentage of Total Property Policy Limits 

60% 50% 47% 50% 

40% 

29% 

30% 

18% 22% 20%

20% 16%15%

10% 

0% 

53% 

13% 

Alien Surplus Captive Insurers Non-Small Insurers Small Insurers 

Lines Insurers 

Insurer Category 

Source: 2021-2023 TRIP Data Calls 

77 Treasury collected information on both property and liability policy limits where terrorism risk insurance was 

provided and coverage for all NBCR events was not entirely excluded. This approach results in an analysis of the 

policy limit levels where at least some terrorism coverage for NBCR-related events is provided. The data is not a 

measurement of the limits insured for any particular type of NBCR event (e.g., nuclear). The figures will therefore 

tend to overstate the total amount of NBCR coverage available, particularly on a per peril basis. Treasury did not 

seek further information concerning workers’ compensation policies because such policies must cover all perils, 

including NBCR risks. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

35 
■ ■ ■ 

Figure 20: 2020-2022 Percentage of Terrorism Risk Insurance Liability Limits 

Where NBCR Exposures are not Entirely Excluded 

2020 2021 2022 

93% 

32% 

43% 

20% 

54% 

32% 

42% 

21% 

53% 

61% 

53% 

22% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

Percentage of Total Liability Policy Limits 

Alien Surplus Captive Insurers Non-Small Insurers Small Insurers 

Lines Insurers 

Insurer Category 

______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2023 TRIP Data Call 

The extent of coverage for NBCR terrorism events is an important consideration because such 

losses may pose a very substantial risk of aggregation of catastrophic terrorism losses, given the 

potential magnitude of attacks using nuclear, biological, chemical, and radiological agents.78 

Recently reported information indicates that small insurers, like other industry segments, 

generally exclude a significant portion of all NBCR-related exposures when they are providing 

coverage for terrorism risk. However, the reported information also continues to show that small 

insurers do not completely exclude NBCR exposures for property risks in proportions 

significantly different than the other industry segments (excepting captive insurers) and there 

also remain variations in connection with liability insurance across all industry segments. While 

the data reflects that each industry segment retains a significant amount of terrorism risk 

exposure that is not subject to a complete exclusion of NBCR-related exposures, the existence of 

such exclusions does indicate that a large NBCR event could result in significant uninsured 

losses and relatively little resulting support from the Program. 

5. Comparison to Other Perils 

The information collected in connection with the 2021, 2022, and 2023 TRIP Data Calls shows 

differences between the participation of small insurers and non-small insurers in the terrorism 

risk insurance marketplace. The TRIP Data Calls did not indicate any differences between 

coverage for terrorism risk as compared to other perils covered by small P&C insurers under 

lines of insurance not subject to TRIP. To obtain further information for purposes of this 

analysis, Treasury also examined market share information for small insurers in the P&C lines of 

insurance that are not subject to the Program. 

78 See, e.g., Section V.F. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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______________________________________________________________________________ 

Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 21 provides the market share by DEP of small insurers and non-small insurers in P&C 

lines not subject to TRIP. DEP is calculated using the 2022 small insurer threshold, as described 

in Section V.A. 

Figure 21: 2013-2022 Small Insurer DEP Market Share in 

P&C Lines of Insurance Not Subject to TRIP 

12.9% 

11.5% 

15.8% 

9.8% 9.9% 10.1% 9.6% 

8.7% 8.8% 

8.1% 

0% 

2% 

4% 

6% 

8% 

10% 

12% 

14% 

16% 

18% 

Market Share (%) 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Year 

Source: S&P Global 

Based on state regulatory reporting data, Figure 21 illustrates that the market share of small 

insurers (compared to non-small insurers) measured by DEP in the P&C lines of insurance not 

subject to the Program has slightly declined since 2013. In the last 5 years, the market shares 

generally ranged between 8 percent and 10 percent, which is slightly less than the 12-13 percent 

share indicated for the TRIP-eligible lines of insurance (see Figure 2) by the information 

reported in the TRIP Data Calls. 

6. 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 shall 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.”79 Accordingly, in 

the 2020 Effectiveness Report, Treasury addressed the availability and affordability of terrorism 

risk insurance for places of worship for the first time, utilizing a new data collection worksheet 

to obtain information on the subject.80 Based upon the first year of data, Treasury determined 

(among other things) that small insurers have a much larger share of the market for terrorism risk 

79 2019 Reauthorization Act, § 502(c); TRIA, § 104(h)(2)(B). 

80 See FIO, 2020 Effectiveness Report, 40-42. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

insurance for places of worship than they have in the overall market.

81 Information from 

subsequent TRIP Data Calls confirms this initial observation. 

Figure 22 shows the market share (in 2020, 2021, and 2022) by insurer category based upon 

reported earned premium for places of worship. 

■ ■ ■ 

___ ___ Ill II 

Figure 22: 2020-2022 Market Share of TRIP-Eligible Lines Premium 

for Places of Worship by Insurer Category 

2020 2021 2022 

3.5 

3.09 

2.85 

TRIP-Eligible DEP ($ billions) 

2.92 3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

-

1.35 1.29 

1.64 1.52 1.43 

1.25 

0.07 0.04 0.04 0.13 0.05 0.05 

Alien Surplus Captive Non-Small Small Total 

Lines Insurers Insurers Insurers Insurers 

Insurer Category 

Source: 2021-2023 TRIP Data Calls 

As shown by Figure 22, small insurers represent, by premium, more than 50 percent of the entire 

TRIP-eligible lines insurance market for places of worship when all lines are considered. 

In terms of take-up rates and premium charged for terrorism risk insurance for houses of 

worship, small insurer results differ slightly when compared against other insurer categories. 

Figure 23 illustrates the 2022 take-up of terrorism risk insurance by places of worship, by 

premium, by insurer category, and by type of coverage. 

81 FIO, 2020 Effectiveness Report, 42 (“Also of note is the significant role played by small insurers, which represent 

(by premium) 45 percent of this market segment, even though they only represent approximately 11 percent of the 

entire market in the TRIP-eligible lines of insurance.”). 

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■ ■ 

II 

Figure 23: 2022 Terrorism Risk Insurance Take-Up Rates by Places of Worship (by 

Premium) (by Insurer Category and Type of Coverage) 

Property Liability 

97% 100% 

85% 86% 90% 80% 82%

80% 74% 73%

44% 

0% 

43% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

Percentage of Category Premium 

Alien Surplus Captive Non-Small Small Total 

Lines Insurers Insurers Insurers Insurers 

Insurer Category 

Source: 2023 TRIP Data Call 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 24 shows for 2022 the percentage charge, by premium, for places of worship, by insurer 

category, and by type of coverage.82 

82 Treasury did not collect information concerning 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 24: 2022 Percentage of Total Policy DEP Allocated to Terrorism Risk for Places of 

Worship (by Insurer Category and Type of Coverage) 

Property Liability WC 

20.0% 

18.0% 

16.0% 

14.0% 

11.5% 12.0% 

Percentage of Industry Premium 10.0% 

8.0% 

6.0% 

3.5% 3.7% 

0.0% 0.0% 0.3% 

4.0% 3.0% 3.0% 2.7% 2.7% 2.4% 2.1% 1.6% 1.7% 

2.0% 0.0% 

0.0% 

Alien Surplus Captive Non-Small Insurers Small Total 

Lines Insurers Insurers Insurers 

Insurer Category 

 

 

 

 

 

 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2023 TRIP Data Call 

Small insurers support a much larger amount of this market than they do for terrorism risk 

insurance overall. The reported data is consistent with prior comments reported by Treasury that 

small insurers may have a much more significant terrorism risk insurance market share in 

particular segments of the market than overall.83 

C. Mandatory Availability Requirement 

TRIA requires insurers to make terrorism risk coverage available within the TRIP-eligible lines 

of insurance on terms that do not materially differ from the terms, amounts, and coverage 

limitations applicable to losses arising from events other than acts of terrorism.84 This 

mandatory availability requirement does not include any pricing restrictions,85 although state law 

rating requirements may define or limit the amounts that an insurer may charge for terrorism 

insurance. As described in Section III, the mandatory availability requirement does not require 

an insurer to offer terrorism coverage for particular risks that an insurer regularly excludes or for 

which it does not offer coverage (such as losses arising from NBCR events).86 As a condition 

for receiving federal payments under the Program, participants must meet certain documentation 

requirements to demonstrate compliance with the mandatory availability requirement.87 

83 See FIO, 2019 Small Insurer Study, 29 & n. 63. 

84 TRIA § 103(c); 31 C.F.R. §§ 50.20(a), 50.22(a). If the prospective policyholder does not accept the mandatory 

offer, the parties may negotiate a different arrangement for terrorism risk coverage which is not on the same terms as 

provided for other risks. 31 C.F.R. § 50.21(c). 

85 See 31 C.F.R. § 50.22(a). 

86 TRIA § 103(c)(2); 31 C.F.R. § 50.22(b). 

87 TRIA § 103(b); 31 C.F.R. Part 50, Subpart B. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Because insurers must offer terrorism risk insurance in TRIP-eligible lines for the risks that they 

are otherwise offering or providing coverage, the mandatory availability requirement affects the 

manner in which insurers underwrite P&C insurance, primarily because of the aggregation risk 

presented by acts of terrorism. A large-scale terrorist attack can result in significant losses 

affecting multiple lines of insurance and multiple policyholders and may be highly concentrated 

within a geographic area. 

Market participants do not have the option to offer a TRIP-eligible lines policy without the 

terrorism risk insurance component. Insurers therefore underwrite to manage potential 

aggregation risks within a particular geographic area or proximity to locations considered 

potential targets for terrorist activity. Insurers of all sizes may employ such analysis when 

deciding whether to write policies that are subject to terrorism risk.

88 

The mandatory availability requirement is not the only factor that may be causing companies to 

provide terrorism risk insurance that they might otherwise prefer not to write. 

First, in a number of lines of insurance and jurisdictions, terrorism risk insurance must be 

provided under state law.

89 In these situations, an insurer must offer terrorism risk insurance 

irrespective of the mandatory availability requirement. As stated in Section V.B., small insurers 

receive a higher percentage of their DEP than non-small insurers from the workers’ 

compensation line of insurance. However, the effects in the market after the September 11 

Attacks and prior to the passage of TRIA suggests that continued small insurer participation in 

this market may be highly dependent upon the existence of the backstop.90 The unique issues 

presented by workers’ compensation insurance are discussed further in Section V.G. 

Second, the ability to offer terrorism risk insurance may be necessary for insurers to compete in 

certain U.S. markets, particularly large metropolitan areas. Take-up rates for terrorism risk 

insurance vary by jurisdiction and locality, and the take-up rate of terrorism risk insurance tends 

to be higher in major metropolitan areas.

91 The TRIP data indicates that the Program promotes 

policyholder access to a variety of carriers, which might be more limited in the absence of a 

88 See U.S. Government Accountability Office, Terrorism Risk Insurance: Market Challenges May Exist for Current 

Structure and Alternative Approaches (January 2017), 18-19, http://www.gao.gov/assets/690/682064.pdf. 

89 The principal example here is the workers’ compensation line of insurance. See Section V.F. for further 

discussion regarding workers’ compensation. “Fire following” states also require terrorism coverage in some 

circumstances. See FIO, 2018 Effectiveness Report, 32 n.84. 

90 Commenters note that similar issues could be presented by changes in the sharing mechanisms under the Program 

that would make it more difficult for small insurers to access the Program. See NAMIC Comments, 2 (“If the 

program were kept in place with the mandatory offer provision, but the various levels were increased to a point 

where small insurers would have to pull out of certain markets due to a fear of being unable to access the TRIA 

program, this would have a negative impact on the broader insurance market in those areas.”). See also Section V.F. 

for a discussion of how the September 11 Attacks affected the workers’ compensation residual market. 

91 For example, Marsh & McLennan has stated that “[t]he federal backstop created by TRIA and reauthorized as 

TRIPRA . . . remains crucial to the continued stability of the property terrorism insurance market.” Marsh & 

McLennan also noted that take-up rates are highest in major metropolitan areas and provided location-specific 

analysis. Marsh & McLennan Companies, 2019 Terrorism Risk Insurance Report (2019), 5, 11, 

https://www.marsh.com/us/services/terrorism-risk/insights/2019-terrorism-risk-insurance-report.html. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

backstop.92 Furthermore, the reported data from the last few years indicates that small insurers 

have maintained a generally consistent market share as compared to non-small insurers. This 

information suggests that the mandatory availability aspects of TRIP as currently structured are 

not discouraging the participation of those insurers in the TRIP-eligible lines market. 

D. Effect of the Program Trigger on Small Insurers 

As described in Section III, even if an insurer satisfies its individual insurer deductible, total 

aggregate insured industry losses must exceed the Program Trigger before the federal share of 

compensation can be paid. Therefore, an insurer with a deductible lower than the Program 

Trigger could satisfy its insurer deductible, but still find that its terrorism losses—even combined 

with those of other insurers (if any)—fall short of satisfying the Program Trigger. The Program 

Trigger requirement therefore could preclude recovery by a small insurer under TRIP and require 

it to take additional steps to manage this exposure. This risk is not faced by larger insurers, 

because they have individual insurer deductibles under the Program that are greater than the 

Program Trigger. 

In 2022, more than 200 domestic U.S. insurance groups reporting in the 2023 TRIP Data Call 

had TRIP deductibles that were less than the Program Trigger. Depending upon the magnitude 

of the terrorism losses experienced by other insurers, they could face a gap between their insurer 

deductible and the Program Trigger.93 Because the Program Trigger will remain constant from 

2020 until 2027, however, this potential gap should not increase further,94 assuming the premium 

writings of small insurers continue to increase over time as Treasury has observed to date. 

There has never been a certified act of terrorism to trigger the Program, and thus there have been 

no situations to date in which a small insurer has been unable to access Program support solely 

on account of the Program Trigger. Commercial reinsurance, assuming it is available and 

affordable, is one way for small insurers to mitigate the impact that a significant terrorism loss 

may have upon the balance sheet of a small insurer that may be unable to access Program 

support solely on account of the Program Trigger. The use of reinsurance for this purpose is 

92 Commenters also noted the potential disruptive effects on the broader insurance market in the absence of a 

backstop, or a backstop that failed to promote the participation of small insurers. See NAMIC Comments, 2 

(“[S]maller regional carriers play an important role in ensuring there is available coverage across lines of insurance. 

If they were forced to exit a market because of their terrorism exposure this means they would also no longer be 

offering the other coverages in other lines as well. Because it is not at all clear that remaining companies could or 

would provide this missing coverage, the probable effect of a higher trigger, etc., would be to reduce the amount of 

total private capital allocated to all risks in certain areas.”). 

93 This analysis does not include small insurers that wrote TRIP-eligible lines DEP of less than $10 million and were 

excused from reporting. This subset of insurers could also be affected. 

94 Commenters have identified the Program Trigger as one of those Program metrics that could depress small insurer 

participation in the Program if increased further. See NAMIC Comments, 3 (“Potential exposure from an increased 

trigger level (or increased individual retention levels and co-pays) could cause smaller insurance companies to pull 

out of terrorism insurance markets thereby decreasing overall competition in that marketplace. Due to the need to 

avoid risk concentrations, larger companies are unlikely to be able to fill all of the coverage needs if this were to 

happen. Increased company retentions, co-shares, and an increased trigger level may cause market participants – 

particularly small- and medium-sized companies – to exit, thereby reducing total private capital.”). 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

described further in Section V.E; how risk modeling can be used to further analyze the issue is 

described in Section V.F.1. 

E. Availability and Cost of Commercial Reinsurance for Small Insurers 

This Section considers the availability and cost of private commercial reinsurance for small 

insurers. It is challenging to assess the availability and cost of private terrorism risk reinsurance 

for small insurers. First, reinsurers are not Program participants, and thus are not subject to 

Treasury’s TRIP Data Calls. Second, reinsurance is neither subject to standard terms and rates, 

nor to the range of state-level reporting requirements applicable to direct insurers in the admitted 

market. Finally, reinsurance arrangements are generally highly complex and customized, with 

many factors affecting price and availability – such as limits, the price of the underlying risk, the 

amount of available information concerning that underlying risk, the claims experience between 

an insurer and its reinsurers, and general market conditions when the reinsurance is sought and 

purchased. Furthermore, reinsurance agreements often cover multiple classes of risks, so it can 

be difficult to isolate and assess how reinsurance specifically responds to terrorism risks. 

A small insurer concerned about its ability to manage terrorism losses within its TRIA deductible 

(or seeking to transfer risk within its co-pay share) may seek to limit its exposure by purchasing 

reinsurance. For example, a small insurer could purchase reinsurance that provides 

reimbursement for any losses experienced if an act of terrorism is certified but the Program 

Trigger is not met by aggregate industry insured losses, such that no payments under the 

Program are made. Whether the purchase of such reinsurance is practical (assuming that it is 

available) will depend, in part, upon the cost of the reinsurance and the insurer’s assessment of 

its ability to bear exposure to such loss without reinsurance. Probable maximum loss (PML) 

information reflects the largest single loss an insurer projects it might sustain based on the 

portfolio of policies it has issued. A small insurer with a modest PML, based upon its book of 

business, will need less reinsurance to protect itself against catastrophic loss, assuming that it has 

evaluated exposures under its portfolio correctly.95 

In its 2021 Small Insurer Study, Treasury noted that reinsurance pricing had begun to increase 

significantly after a lengthy “soft” market period characterized by relatively low reinsurance 

premium rates and relatively high capacity.96 While market capacity has remained available for 

most P&C risks, loss-impacted accounts have faced challenges (including substantial price 

increases).

97 Market information addressing 2022 reinsurance purchases reflects the continued 

hardening of the P&C reinsurance market (largely driven by significant catastrophe losses), with 

95 PML, as defined for purposes of Treasury’s collection of data from participating insurers, seeks the largest loss 

figure for a single insurer emanating from a single location, assuming the detonation of a 5-6 ton truck bomb at that 

location. See FIO, Instructions for Terrorism Risk Insurance Program (TRIP) 2023 Data Call: Small Insurers, 28, 

https://home.treasury.gov/system/files/311/2023%20Data%20Call%20Instructions%20Small%20Insurers%20%28F 

INAL%29.pdf. 

96 FIO, 2021 Small Insurer Study, 42-43. 

97 See 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; 

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/. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

estimates of pricing increases during the year of approximately 15 percent.98 Reinsurance capital 

also declined in 2022, in part because of reductions in the value of reinsurers’ investments.99 

Figure 25 illustrates the percentage of TRIP-eligible lines premiums ceded by direct insurers to 

reinsurers between 2013 and 2022. 

 

I 

■ ■ 

Figure 25: 2013-2022 Percentage of DEP Ceded by Insurers to Reinsurers 

(by Insurer Category)100 

45% 42% 

TRIP-Eligible Premium Ceded to 

Reinsurers (%) 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

35% 35% 

37% 

33% 

28% 

26% 27% 27% 

30% 

17% 16% 17% 17% 17% 17% 

19% 20% 21% 

24% 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

TRIP Small Insurer TRIP Non-Small Insurer 

Source: S&P Global 

Figure 25 reflects, as Treasury has observed in most of its prior analyses, that small insurers 

typically cede a greater percentage of their direct premiums to reinsurers than do larger insurers. 

98 Luke Gallin, “US Property Cat Reinsurance Rates-On-line Up 30.1% at January Renewals: Guy Carpenter,” 

Reinsurance News, Feb. 2, 2023 (reflecting a 14.8 percent increase of the Guy Carpenter U.S. Property Catastrophe 

Rate on Line Index during 2022), https://www.reinsurancene.ws/us-property-cat-reinsurance-rates-on-line-up-30-1-

at-january-renewals-guy-carpenter/. 

99 Gallagher Re, Reinsurance Market Report: Results for Full-Year 2022 (2023), 8, 

https://www.ajg.com/gallagherre/-/media/files/gallagher/gallagherre/reinsurance-market-report-for-full-year2022.pdf. Initial indications respecting 2023 renewals (outside the scope of this Study, as the most recently 

collected reinsurance information for small insurers is for CY 2022) reflect even greater price increases and market 

hardening. See Gallin, “US Property Cat Reinsurance Rates On-line Up 30.1% at January Renewals.” 

100 In prior small insurer studies, Treasury arrayed this information by reference to the small insurer definition then 

applicable, further adjusted by the Consumer Price Index (CPI). This presentation was done because of the 

Program’s fluctuating size definition of small insurers over time and so that the size of small versus non-small 

insurers in each year was comparable for analytical purposes. This presentation has also resulted in the reporting of 

different percentages for the same calendar years in different small insurer studies. The size definition of small 

insurers for Program purposes is now stable through 2027. Therefore, Treasury is arraying the information in this 

Study based upon the 2020 size definition of small insurers, adjusted by the CPI, only for years before 2020, and 

will continue to do so in future studies. The information arrayed on this basis will more consistently reflect any 

trends in purchasing reinsurance. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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■ ■ ■ 

■ 

Figure 26: 2020-2022 Total Per Loss Reinsurance Limits Purchased for Losses Subject to 

TRIP (by Insurer Category) 

2020 2021 2022 

60 

51.0 48.2 49.0 

50 

40 

30.9 

26.9 28.1 30 

17.0 20 13.2 13.1 11.6 11.2 10.5 

10 

0

Limits of Any One Loss of 

Purchased Reinsurance Covering 

TRIP Loss ($ billion) 

Alien Surplus Lines Captive Insurers Non-Small Insurers Small Insurers 

Insurers 

Insurer Category 

 

 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Figure 26 identifies the total amounts of per loss terrorism risk reinsurance purchased by 

responding insurers that will cover losses subject to the Program, during the period 2020 to 2022. 

Source: 2021-2023 TRIP Data Calls 

As illustrated by Figure 26, reported terrorism risk reinsurance purchases by small insurers, as 

measured by limits, declined in 2022, while all other industry segments reported increased or 

basically flat purchases by limits. 

The 2022 and 2023 TRIP Data Calls also collected information from insurers concerning their 

associated PML amounts, which factors in the relative size of the exposures underwritten by 

small insurers, in order to determine the extent to which PML levels may be guiding reinsurance 

purchases. Figures 27 and 28 illustrate the 2021 and 2022 average reinsurance purchases for 

small insurers with reference to small insurer deductibles under the Program, the Program 

Trigger, and average PML amounts reported by those insurers. 

FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT OF THE TREASURY 

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-

-

Figure 27: 2021 Comparison Between 

Small Insurer Deductibles, Reported PML Amounts, and Reinsurance Purchases 

Average Attachment Point Average Reinsurance Coverage 

PML Amount Program Trigger 

Insurer Program Deductible ($ millions) 

0-5 

5-10 

10-15 15-20 20-30 30-40 40-60 

+60 

0 

100 

200 

300 

400 

500 

600 

Reinsurance ($ millions) 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: 2022 TRIP Data Call 

-

-

Figure 28: 2022 Comparison Between 

Small Insurer Deductibles, Reported PML Amounts, and Reinsurance Purchases 

Average Attachment Point Average Reinsurance Coverage 

PML Amount Program Trigger 

600 

500 

400 

300 

200 

100 

0 

Insurer Program Deductible ($ millions) 

0-5 

5-10 

10-15 15-20 20-30 30-40 40-60 

+60 

Reinsurance ($ millions) 

Source: 2023 TRIP Data Call 

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Where reinsurance purchases approximate a small insurer’s PML, the lack of reinsurance up to 

the Program Trigger may not be as significant, if this reflects that the small insurer is less likely 

to be exposed to a catastrophic loss up to the Program Trigger amount. As shown in Figures 27 

and 28, PML estimates below the Program Trigger may explain the lack of reinsurance 

purchases up to the amount of the Program Trigger in some cases. The reported information, 

however, continues to reflect a significant portion of small insurers that remain exposed for a 

PML above the insurer deductible and below the Program Trigger threshold, without the support 

of private reinsurance for all of that exposure. In both 2021 and 2022, the data continues to 

reflect that most sizes of small insurers, on average, have some PML exposure above average 

reinsurance purchases, and at levels below the Program Trigger. 

F. Terrorism Risk Insurance Catastrophe Modeling 

Catastrophic risk modeling may assist Treasury and program participants in evaluating how 

small (and other) insurers are impacted by the Program and the type of terrorist events to which 

the Program may be required to respond. Treasury has recently deployed certain modeling 

resources to assist in its administration of the Program. Treasury addresses the background of 

this work and certain initial outcomes below. 

In its May 2020 Report, the Advisory Committee on Risk-Sharing Mechanisms (ACRSM) 

recommended that Treasury invest in a “small, dedicated analyst team focused on terrorism risk 

modeling, with budget and scope allowing for the pursuit of modeling partnerships.”101 The 

ACRSM Report suggested that FIO obtaining such modeling capability could improve FIO’s 

administration of TRIP. The ACRSM report further noted that such modeling could facilitate the 

ability of private insurers to assess terrorism risk, provide for more accurate private insurance 

pricing, and consequently encourage private insurers to assume more terrorism risk exposure. 

The ACRSM recommended that the insights derived from this work could help expand private 

risk appetite and thus potentially aid in a decrease in the U.S. government’s exposure under 

TRIP. 

Subsequently, Treasury contracted to acquire commercial software and services to conduct 

terrorism risk insurance modeling with a cyber risk modeling component. This procurement is 

intended to aid the efficient and effective administration of TRIP by giving FIO the capability to 

evaluate potential terrorism losses arising from a variety of events, including cyber attacks, and 

how they would likely implicate the loss sharing arrangements under TRIP. The ability to 

evaluate potential terrorism losses also will aid Treasury’s assessment of how the Program may 

respond to particular events. The modeling also provides insights into how the private market 

evaluates the risk of terrorist events. 

Terrorism risk insurance modeling originally evolved from computer-based catastrophe 

modeling and simulations that were developed in response to the devastating losses caused by 

101 ACRSM, Initial Report of the Committee (May 11, 2020), https://home.treasury.gov/system/files/311/5-20-

ACRSM-Report-Final.pdf. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

natural disasters such as Hurricane Andrew (1992) and the Northridge Earthquake (1994).102 

Following these events, it became apparent that commonly used actuarial methods relying on 5-

to 25 years of historical catastrophe losses were not adequate for pricing and risk management of 

certain future catastrophic events.103 Catastrophe models were developed to address these 

actuarial limitations by providing better loss estimates associated with extreme weather events, 

and their use has since expanded to non-weather risks, including but not limited to terrorism and 

cyber.104 

Insurers, reinsurers, and brokers involved with the placement of P&C insurance and reinsurance 

products are key users of catastrophe models.

105 They use these tools to both estimate the effect 

that catastrophe losses could have on their books of business and assist them in making decisions 

about where to write business, ratemaking, loss mitigation, risk selection, and the efficient use of 

reinsurance. In addition, both state and federal government agencies use catastrophe models to 

address public policy issues, including analyses of the size and cost of potential public losses, the 

assessment of potential insurance needs from the private market, and planning mitigation 

efforts.106 

Catastrophe models typically feature three major components or “modules”: (1) scientific, 

(2) engineering, and (3) insurance.107 The scientific module produces output about one or more 

physical characteristics of the catastrophic event, such as wind speed for hurricane events or the 

destructive force of a 5-ton truck bomb in the case of a modeled terrorism event. The 

engineering module uses the characteristics of the affected built environment to estimate the 

degree of damage from an event. The damage estimates from the engineering module are used 

by the insurance module to estimate dollars of insured damage. The insurance module can then 

incorporate characteristics about a particular structure’s insurance coverages such as type and 

amounts of coverage, replacement cost, deductibles, and coinsurance, as well as applicable 

reinsurance arrangements.

108 

There are several benefits to the use of catastrophe modeling. One of the primary benefits is that 

these tools allow users to analyze “what if” scenarios to assess the impact of modeled 

catastrophe risks and, consequently, enable users to preemptively develop responsive and 

proactive risk management strategies.

109 Further, catastrophe models can simulate a wider range 

102 N. Shome, et al., “Quantifying Model Uncertainty and Risk,” in G. Michel (ed.), RISK MODELING FOR HAZARDS 

AND DISASTERS, xi (Amsterdam 2018). 

103 American Academy of Actuaries, Uses of Catastrophe Model Output, 5 (July 2018), 

https://www.actuary.org/sites/default/files/files/publications/Catastrophe_Modeling_Monograph_07.25.2018.pdf. 

104 “Catastrophe Models,” NAIC, last updated April 3, 2023, https://content.naic.org/cipr-topics/catastrophe-modelsproperty. 

105 “Catastrophe Modelling,” The Journal, March 6, 2017, https://thejournal.cii.co.uk/studyroom/z/2017/03/06/catastrophe-modelling. 

106 American Academy of Actuaries, Uses of Catastrophe Model Output, 2. 

107 NAIC, Catastrophe Computer Modeling Handbook (2011), 11-12, 

https://content.naic.org/sites/default/files/inline-files/prod_serv_special_ccm_op.pdf. 

108 NAIC, Catastrophe Computer Modeling Handbook, 11-12. 

109 American Academy of Actuaries, Uses of Catastrophe Model Output, 33. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

of plausible events than are encompassed by historical experience,110 thus giving private insurers 

and reinsurers an improved ability to estimate a range of direct, indirect, and residual losses for 

ratemaking and other coverage decisions. 

Conversely, one of the main shortcomings of catastrophe modeling is that natural and man-made 

events likely will transpire in a different way in the real world as compared to those modeled in 

virtual simulations.111 Further, given the rarity of some catastrophic events like terrorism, there 

is limited availability of data needed to validate model assumptions and results. Consequently, 

these data deficiencies make models highly assumption-dependent and produce significant 

uncertainties in the estimation of losses from catastrophic events.112 

The terrorism risk insurance modeling tools that Treasury acquired for TRIP allow Treasury to 

use commercially available geocoded U.S. property and employment data to generate property 

and casualty damage estimates for specific locations (e.g., by GPS coordinates, address, ZIP 

Code) resulting from a variety of different modeled conventional (e.g., a 5-ton truck bomb) and 

unconventional (i.e., NBCR) attack modes at various times of day. Combining these outputs 

with likely insurance coverage information (such as that collected in Treasury’s annual data 

calls) allows Treasury to estimate property and workers’ compensation losses by line of 

insurance for each scenario. Treasury can also estimate the percentage of total P&C insurance 

losses retained by policyholders, and the estimated financial impact on TRIP. 

The following two subsections discuss some of Treasury’s modeling analyses. Specifically, 

Section V.F.1 discusses the likelihood that losses of other insurers may satisfy the Program 

Trigger when losses of a particular small insurer do not satisfy the Program Trigger. Section 

V.F.2 discusses the likelihood that certain types of terrorist attacks could implicate TRIP’s 

Program Cap of $100 billion. 

1. Use of Terrorism Risk Modeling to Evaluate Likelihood of Other Losses 

Satisfying the Program Trigger when Considered in Association with 

Reported Probable Maximum Losses 

The Program Trigger ($200 million annually) is the amount of insured losses (e.g., payments for 

a certified act of terrorism by insurers under their policies) that must be sustained before 

Treasury may reimburse an insurer for the federal share of compensation—even if that insurer 

has otherwise satisfied its Program deductible of 20 percent of its prior year DEP in the TRIPeligible lines of insurance. The Program Trigger has the effect of excluding lower-loss terrorism 

events from the Program. However, the Program Trigger could preclude a small insurer from 

recovering under the Program in connection with an event that, while relatively small when 

considered across the entire insurance industry, could have a significant impact upon a particular 

110 American Academy of Actuaries, Uses of Catastrophe Model Output, 33. 

111 “Modelling and simulation,” BBC Bitesize, 3, https://www.bbc.co.uk/bitesize/guides/zyqfr82/revision/1. 

Additionally, catastrophe models are highly complex, and as with any complex model, mistakes can be made in the 

programming or rules of the simulation that produce erroneous results. 

112 N. Shome, et al., “Quantifying Model Uncertainty and Risk,” 3. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

small insurer if it is disproportionately affected by the loss. (See also Section V.D.) 

Treasury defined “small insurer” with reference to the potential impact of the Program 

Trigger.113 A non-small insurer (i.e., an insurer with $1 billion or more in prior-year TRIPeligible lines DEP) is one that could possibly trigger the Program based upon its own losses, as it 

would necessarily have a deductible of $200 million or more. This results in the Program being 

triggered if the deductible of a single non-small insurer was met. A small insurer (i.e., an insurer 

with prior-year TRIP-eligible DEP less than $1 billion) could potentially satisfy its own 

deductible (which would be under $200 million) but be unable to make a claim for the federal 

share of compensation from TRIP if losses from other insurers did not aggregate to an amount 

equal to or greater than the Program Trigger. Therefore, a small insurer would only be able to 

make a claim under the Program in this situation if its own losses when combined with the losses 

of other insurers collectively satisfied the Program Trigger. 

Treasury has noted the potential impact of the Program Trigger on small insurers in previous 

small insurer studies. In the 2017 Small Insurer Study, Treasury found a significant number of 

small insurers reported a gap between their Program Deductible (and/or reinsurance protection) 

and the Program Trigger, which small insurers could be responsible for absorbing if the Program 

Trigger was not otherwise met.114 In the 2018 TRIP Data Call, Treasury started collecting from 

each reporting insurer, including small insurers, the amount and ZIP Code location of the largest 

PML for that insurer because of a 5-6 ton truck bomb. Treasury then examined the interplay 

between PML, the Program Deductible, reinsurance, and the Program Trigger. Treasury 

continued to find “a significant portion of small insurers that remain exposed for a PML above 

the insurer deductible and below the Program Trigger threshold, without the support of private 

reinsurance for that exposure.”115 

However, Treasury’s prior analyses did not contain an assessment of the likelihood that the 

aggregated losses of all insurers could allow the Program Trigger to be met. In a terrorist attack, 

this assessment would depend upon the number of insurers impacted by a particular act of 

terrorism and the insured losses they sustain. 

Treasury’s new modeling tools—which model likely loss amounts arising from specified events 

at particular ZIP Codes—allow Treasury to estimate how small insurers’ PMLs for a 5-ton truck 

bomb at a particular location and time could be combined with other insurers’ losses to 

potentially meet the Program Trigger. Specifically, using information reported in the 2022 TRIP 

Data Call,116 Treasury has: 

(1) mapped, where possible, those ZIP Codes with modelled 5-ton truck bomb attacks to 

the reported PML amounts provided by small insurers; 

113 See Section III (Small Insurer Definition). 

114 FIO, 2017 Small Insurer Study, 25-27. 

115 FIO, 2021 Small Insurer Study, 46. See also FIO, 2019 Small Insurer Study, 41-43; Section V.E. 

116 Given the timing of the data call, Treasury used information from last year’s data call in order to have more time 

to perform these analyses. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

(2) estimated all loss (from both property and workers’ compensation) arising from 

modeled truck bomb events and adjusted the loss amounts to account for policyholder 

losses and take-up rates (in order to reach an insured loss estimate); and 

(3) identified those small insurers reporting their PML in a ZIP Code where the adjusted 

model results reflect that the Program Trigger is unlikely to be met (i.e., total insured 

losses arising from the event will be less than $200 million). Treasury then examined 

the reported PMLs and reinsurance of these small insurers in more detail to assess 

their potential risk of not being able to access Program benefits because of the 

Program Trigger limitations described above. 

Treasury’s analysis yielded the following results: 

• 141 small insurers (out of 171 small insurers reporting on the relevant form) reported 

PML amounts by ZIP Code. 

• Of these small insurers, the model identified 5-ton truck bomb scenarios in 120 ZIP 

Codes, or 85 percent of the total ZIP Codes in which small insurers reported information. 

• Within the set of 120 identified ZIP Codes, the PMLs of 17 small insurers were located 

within ZIP Codes where a modeled 5-ton truck bomb loss, once adjusted, would likely be 

below the $200 million Program Trigger, but above that small insurer’s Program 

deductible. 

• Of this cohort of 17 small insurers, only 4 small insurers reported purchases of 

reinsurance at limits that are either at or above their reported PML amounts. 

This analysis indicates that when the losses of a single insurer may not satisfy the Program 

Trigger, the Program Trigger may be satisfied in certain cases by the aggregate losses sustained 

by other insurers in connection with a particular act of terrorism. However, the analysis also 

shows that the Program Trigger may not be satisfied in all situations. For example, based upon 

the modeling and analysis, this appears to not occur for as many as 14 percent of the small 

insurers assessed. Treasury will continue to study how small insurers are assessing their 

exposure to terrorism risk and their ability to obtain private reinsurance coverage for when their 

terrorism risk exposure may be insufficient to trigger the Program. For example, in the analysis 

described above, a majority of the affected small insurers did not have such reinsurance 

protection in place. 

2. Use of Terrorism Risk Modeling to Evaluate Impact of Program Cap in 

Connection with Different Types of Terrorist Attacks 

The TRIP Program Cap of $100 billion limits payments by Program participants and the federal 

government in any one calendar year. If that amount is reached, no further payments by either 

Program participants or the government would be made to policyholders. Rather, payments to 

policyholders would be prorated such that the $100 billion cap would not be exceeded, and 

policyholder losses in excess of the capped amount would not be covered, even if the coverage 

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limits of their TRIP-eligible terrorism risk insurance were not exhausted. 

Modeling tools and analytics can also provide information regarding the type of events that, if 

certified as acts of terrorism, would be likely to exceed the Program Cap. This analysis provides 

information regarding the magnitude and distribution of losses that might not be reimbursed 

under the Program. 

Modeling and Treasury’s analysis indicates that truck bomb blasts, regardless of size, would be 

unlikely to result in losses that would exceed the Program Cap. This conclusion is consistent 

with the results of Treasury’s modeled loss questions posed in the TRIP Data Calls.117 Figure 29 

illustrates the likely range of losses to insurers and the Program based upon truck bomb blasts of 

various sizes and in various locations. 

Figure 29: Projected Program Impact (Insurers and TRIP Reimbursement) from Top Ten 

Modeled Truck Bomb Attacks 

Conventional Bomb Range of Top Ten 

Terrorism Events Insured Losses 

10 Ton Bomb $24.6 to 32.3 Billion 

5 Ton Bomb $16.8 to 24.3 Billion 

2 Ton Bomb $9.2 to 13.5 Billion 

Source: FIO Analysis of Terrorism Risk Models 

This analysis shows that the Program would likely respond to a truck bomb attack, given the size 

of projected losses. The modeling and FIO’s analysis also indicate that total losses paid from a 

truck bomb attack would be unlikely to exceed the Program Cap unless there were multiple 

events in a single year that, in the aggregate, reached the cap. Finally, the truck bomb modeling 

indicates that payments made by the federal government would more than likely be subject to 

recoupment because total payments will be under the IMARA, such that the government would 

recover any amounts it expended at the enhanced 140 percent recoupment percentage. 

Modeling and Treasury’s analysis further indicates that the sort of events that could potentially 

result in loss amounts exceeding the Program Cap are acts of terrorism involving NBCR agents. 

Figure 30 illustrates the likely distribution of property and workers’ compensation losses to 

insurers and the Program (i.e., assuming the Program Cap did not apply) based upon different 

types of modeled NBCR events of various sizes and in various locations. Importantly, this 

analysis accounts for take up of terrorism risk insurance and assumes policies typically cover 

NBCR risk exposures. 

117 See FIO, 2018 Effectiveness Report, 47-53; FIO, 2020 Program Effectiveness Report, 49-55; FIO, 2022 Program 

Effectiveness Report, 50-54. 

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Figure 30: Projected Uncapped Program Impact (Insurers and TRIP Reimbursement) 

from Selected Top Ten NBCR Attacks by Type 

NBCR 

Terrorism Events 

 Range of Top Ten 

Insured Losses 

Large Nuclear Bomb $200.4 to 537.7 Billion 

Biological - Anthrax - Large, Outdoors $492.1 to 508.4 Billion 

Small Nuclear Bomb $203.1 to 322.8 Billion 

Large Dirty Bomb $49.5 to 67.7 Billion 

Chemical - Sarin Gas - Large, Outdoors $18.2 to 21.7 Billion 

Chemical - Sarin Gas - Small, Indoors $3.7 to 27.4 Billion 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: FIO Analysis of Terrorism Risk Models 

However, the losses shown in Figure 30 do not fully account for the actual amount of coverage 

for NBCR events provided by policies subject to the Program, even under policies in which 

terrorism risk insurance coverage has been obtained. This is because insurers may exclude such 

losses from their policies in all cases, to the extent permitted under state law. In this situation the 

Program also permits the exclusion of such amounts even if associated with an act of terrorism. 

As noted in Section V.G, workers’ compensation policies cannot exclude NBCR risk exposure, 

and the analysis in Figure 30 already accounts for self-insurance in workers’ compensation that 

would not be subject to the Program. 

Unlike workers’ compensation insurance, property insurance is not subject as a matter of state 

law to mandatory coverage for NBCR risk exposures. Information from TRIP Data Calls 

indicates that usually some amount of NBCR coverage is provided if the policy includes 

terrorism risk coverage. The NBCR coverage varies by type of insurer, but Treasury has found 

that on average about 80 percent of all NBCR property risk exposures, by limits, are excluded 

from TRIP-eligible lines policies even when coverage for terrorism risk is otherwise provided 

(see Figure 20). 

If the property exposures analyzed in Figure 30 for modeled NBCR events are reduced by an 80 

percent reduction factor, the total projected distribution of losses to insurers and the Program is 

adjusted as shown in Figure 31. 

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Figure 31: Projected Uncapped Program Impact from Selected Top Ten NBCR Attacks 

Type of Terrorism Event 

(Reduced Property Exposure on Account of Exclusions) 

NBCR Range of Top Ten 

Terrorism Events Insured Loses 

Large Nuclear Bomb $123.7 to 385.5 Billion 

Biological - Anthrax - Large, Outdoors $319.3 to 407.3 Billion 

Small Nuclear Bomb $117.7 to 217.7 Billion 

Large Dirty Bomb $16.8 to 21.8 Billion 

Chemical - Sarin Gas - Large, Outdoors $15.5 to 18.0 Billion 

Chemical - Sarin Gas - Small, Indoors $3.5 to 27.3 Billion 

by 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Source: FIO Analysis of Terrorism Risk Models 

Therefore, even after accounting for the likely significant reduction of Program exposure from 

an NBCR event based on NBCR exclusions, this analysis indicates the likelihood of some 

terrorism events resulting in losses in excess of the Program Cap and triggering the pro rata 

payments required by the Program.118 

* * * * * 

Risk modeling provides Treasury with additional tools to evaluate how the Program will operate 

in various circumstances and will assist Treasury in its administration of the Program. Risk 

modeling can also help assess the extent to which specific market participants may be able to 

increase their private risk capacity for terrorist events. Data from the TRIP Data Calls also can 

be analyzed in association with the information available commercially potentially inform what 

information may be sought in future TRIP Data Calls. Risk modeling can also assist Treasury in 

assessing whether any changes to the Program may be needed in future years. Treasury will 

continue working with these tools and plans to include additional analyses in future reports. 

G. Impact of State Workers’ Compensation Laws 

The workers’ compensation system provides an important mechanism for the protection of U.S. 

workers from the consequences of employment-related injuries and illnesses.

119 Certain aspects 

of this important workplace protection system increase the aggregate terrorism exposures of 

insurers participating in the workers’ compensation market. 

The costs of medical care and treatment, rehabilitation, loss of wages, and other financial 

hardships faced by employees who experience job-related injuries are covered under workers’ 

compensation policies. Because payments under these policies are defined by the scope of 

benefits mandated under state law and are not subject to express limits of liability, losses under a 

118 In addition, state “fire following” laws in some jurisdictions could further increase the exposure of insurers to 

NBCR losses in certain situations. See FIO, 2018 Effectiveness Report, n.84. 

119 The 2022 Effectiveness Report provides an overview of the workers’ compensation system in the United States. 

FIO, 2022 Effectiveness Report, 86-87. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

workers’ compensation policy are potentially unlimited.120 Workers’ compensation policies are 

subject to specific pricing rules under state law, which will limit what insurers can charge 

(generally as well as specifically for terrorism risk) and potentially affect whether the purchase 

of reinsurance is economically viable.121 Thus, although the workers’ compensation line remains 

a profitable one for insurers,122 a large-scale act of terrorism could create significant aggregation 

risks for both small insurers and non-small insurers writing workers’ compensation insurance, 

particularly in the event of extensive losses arising from an NBCR event.123 

Because insurers are required by state law to cover terrorism risk (including NBCR-related 

terrorism risk) in connection with workers’ compensation insurance, workers’ compensation 

carriers must find ways to manage their aggregation risk. One potential option for workers’ 

compensation carriers includes declining to write certain risks altogether. For example, insurers 

may avoid writing policies that could create a substantial accumulation of exposures in the same 

location. However, this could present challenges for insurers that seek to write business in large 

metropolitan areas with dense populations, as well as for employers seeking to purchase 

coverage in those areas. 

To the extent coverage is unavailable in the “voluntary” market, policyholders may need to 

obtain workers’ compensation insurance in a state’s residual market, which is required to provide 

coverage to all applicants.

124 Coverage provided in residual markets tends to require a higher 

premium, and the responsibility for paying claims is distributed among all insurers writing in the 

state. After the September 11 Attacks, the market share of the residual market for workers’ 

120 National Academy of Social Insurance, Workers’ Compensation: Benefits, Costs, and Coverage (November 

2022), 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), https://www.nasi.org/wpcontent/uploads/2022/11/2022-Workers-Compensation-Report-2020-Data.pdf. See also, e.g., New York 

Compensation Insurance Rating Board Digital Library, Workers’ Compensation and Employers Liability Policy -

Rule VII (Limits of Liability), https://www.nycirb.org/digital-library/public/page/wcel-latest/A4E00D96-5539-

4FD3-9489-41864BBB4012?section_id=A4E00D96-5539-4FD3-9489-41864BBB4206 (“There is no limit of 

liability in the Standard Policy for Part One – Workers’ Compensation. The policy provides all benefits 

required by any workers’ compensation law of a state listed in Item 3.A. of the Information Page.”). 

121 See Atlantic Charter’s remarks to TRIA Federal Advisory Committee (March 31, 2017), 11, 

https://home.treasury.gov/system/files/311/Presentation_Atlantic_Charter.pdf (noting potential disconnect between 

permitted premium charges for direct insurance and potential reinsurance costs). One commenter addressed the 

development of terrorism loss costs controlling the premium charge for workers’ compensation insurance under 

state law. See NCCI Comments, 3-4. The commenter also explained how modeling is used to determine, in part, 

the portion of premium charged for terrorism risk. Id., see also Section V.F (discussing use of modeling in the 

insurance industry). Because the manner in which the risk is modeled takes into account the existence of the TRIP 

backstop, the absence of TRIP would necessarily result in increased cost factors. See NCCI Comments, 3-4. 

122 See “2023 State of the Line Guide,” NCCI, last updated May 9, 2023, 

https://www.ncci.com/SecureDocuments/SOLGuide_2023.html (reporting for 2022 a calendar year combined ratio 

of 84 percent, “a sign of underwriting profitability for the system”). 

123 See Section V.F.2. 

124 A residual market provides insurance coverage for policyholders that cannot obtain coverage in the regular, or 

voluntary, market. Insurers operating in a particular jurisdiction are generally required to participate in residual 

markets as a condition of doing business in the voluntary market. The extent of an insurer’s participation in the 

residual market is generally based upon its share of the voluntary market. See, e.g., NCCI Comments, 2. 

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Non-Small Insurers ■ Small Insurers 

60% 56% 55% 

40% 42% 

0% 

2021 2022 

Figure 32: 2021-2022 Reinsurance Purchases Including Coverage for Workers’ 

Compensation Losses Arising from NBCR Risks (by Insurer Category) 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

compensation significantly increased, and included individual risks viewed as “high profile” 

targets for purposes of terrorism risk.125 Since the enactment of TRIA, the share of the workers’ 

compensation residual market stabilized between 4 to 6 percent of the market, and currently 

remains at about 6 percent, viewed as a “manageable market share,” which is a level consistent 

with the size of the residual market before the September 11 Attacks.

126 

Private reinsurance can help insurers in the workers’ compensation market manage their 

aggregation risks, including those from NBCR events. Figure 32 analyzes the extent to which 

private reinsurance purchased by insurers writing workers’ compensation insurance since the last 

Small Insurer Study included coverage for NBCR risks associated with workers’ compensation 

policies. 

Source: 2022-2023 TRIP Data Calls 

The TRIP Data Calls continue to indicate that a significant percentage of small insurers with 

workers’ compensation risks did not purchase any reinsurance coverage for workers’ 

compensation losses caused by NBCR risks.127 The minority of small insurers that did obtain 

reinsurance coverage for this type of risk did so at limits lower than the limits obtained under 

their conventional terrorism reinsurance policies.

128 

In contrast, Figure 32 demonstrates that a higher percentage of non-small insurers obtained 

reinsurance coverage for workers’ compensation losses arising from NBCR risks, as compared to 

small insurers. However, although the limits such insurers obtained were higher than the limits 

125 NCCI Comments, 2-3. 

126 NCCI Comments, 3. 

127 Treasury analyzed this issue in its 2021 Small Insurer Study. See FIO, 2021 Small Insurer Study, 48-49. 

128 For example, small insurers that obtained NBCR reinsurance limits for workers’ compensation in 2021 obtained 

an average per loss limit of $43 million, compared to a general average terrorism reinsurance limit of $95 million. 

In 2022, these figures were $41 million and $96 million, respectively. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

purchased by small insurers for workers’ compensation NBCR exposures, the amounts of 

coverage that non-small insurers obtained for NBCR risks were much lower than their limits for 

conventional terrorism risk—only about 25 percent of total terrorism risk reinsurance limits of 

such insurers in any one year.129 

Treasury’s data indicates that the unique terrorism-related risks posed by the workers’ 

compensation system have not prevented small insurers from participating in this market. 

However, it remains unclear as to whether this continued participation is due to the existence of 

the Program, or another cause. If large workers’ compensation losses fall disproportionately 

upon a small number of participating insurers, and otherwise exceed the Program Trigger, TRIP 

provides a backstop that will operate as a risk-spreading mechanism across the industry. In this 

situation, the Program could be a factor that allows an insurer to continue participating in the 

workers’ compensation market.

130 Although this risk-spreading mechanism applies irrespective 

of the size of the insurer participating in the workers’ compensation market, it may be more 

critical for small insurers. 

129 For example, in 2022, the reported average purchase of NBCR workers’ compensation reinsurance on a per loss 

basis by non-small insurers was $190 million—as compared with an average limit of $719 million obtained by those 

same non-small insurers for conventional terrorism risk. 

130 One commenter noted that “[g]iven 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 insurance market.” NCCI Comments, 4. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

VI. CONCLUSION 

Small insurers are important components of the large and diverse U.S. insurance market, and 

they are significant participants in the market for terrorism risk insurance in the United States. 

The market share of small insurers in the TRIP-eligible lines of insurance has been relatively 

constant since 2017. In some areas, such as coverage provided to places of worship or cyber 

coverage provided to small policyholders, small insurers may have a larger than average 

percentage, or even the largest market share. While coverage in the lines of insurance subject to 

the Program generally remains concentrated in larger, non-small insurers, small insurers play a 

significant role for some policyholder segments and in many areas of the country. 

Treasury’s study found that, as reflected in prior data calls, small insurers tend to charge less 

overall than non-small insurers for terrorism risk insurance, when a charge is assessed. 

However, small insurers no longer remain more likely to charge no premium for such coverage. 

Additionally, terrorism risk insurance take-up rates by the policyholders of small insurers are 

now slightly lower than the take-up rate for non-small insurers’ policyholders. Small insurers 

also tend to operate on a regional basis by writing in fewer states than non-small insurers. Small 

insurers also have heavier concentrations of writings in the CMP and workers’ compensation 

lines of insurance (and therefore a larger overall market share in those lines) than non-small 

insurers. Small insurers do not participate in a significant way in the market for standalone 

terrorism insurance policies, and typically report few if any policies issued. However, they do 

participate in the market for cyber insurance, including cyber terrorism insurance under TRIA, 

and are more heavily concentrated in cyber risk insurance issued to small policyholders. 

Furthermore, small insurers’ greater market share of workers’ compensation insurance, where 

NBCR insurance must be provided, increases their total risk of aggregated exposure arising from 

such losses. 

The mandatory availability requirement mandates small insurers offer and write terrorism risk 

insurance in some circumstances where they otherwise might not. The financial backstop 

provided by the Program provides some support to mitigate the economic impact of this 

requirement for small insurers. If the federal backstop becomes insufficient because of changes 

in market conditions or Program mechanics, the mandatory availability requirement could cause 

small insurers to not provide insurance in certain markets. This could reduce the availability of 

insurance—not only of terrorism risk insurance, but also in other TRIP-eligible lines of 

insurance. 

Additionally, in some circumstances, the Program Trigger requirement could prevent small 

insurers who have met their individual insurer deductibles from receiving the federal share of 

compensation. Small insurers will be protected from such outcomes where the aggregate of all 

insurer losses will exceed the Program Trigger. Modeling analysis also indicates that, in many 

cases, the existence of other insurer losses will satisfy the Program Trigger where it would not be 

satisfied based upon the losses of a single small insurer. However, a highly concentrated act of 

terrorism that affects a limited number of insurers could result in insured losses that fail to reach 

the Program Trigger. Although small insurers may purchase private reinsurance to avoid this 

potential risk, many small insurers do not purchase sufficient private reinsurance to address this 

possibility—however infrequent the potential loss may be. Furthermore, the reported data 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

indicates that while small insurers continue to cede significant, and increasing, amounts of their 

DEP for reinsurance purchases, aggregate reinsurance purchases by limits reported by small 

insurers covering losses subject to the Program have declined in recent years. Increases in 

private reinsurance rates in the P&C market generally, as reported by other industry sources, may 

be resulting in this reduction in available limits. 

Small insurers could have the highest potential for unreimbursed losses in connection with the 

workers’ compensation line of insurance. Small insurers have a larger share of this market, 

which is subject to very high loss amounts with no defined limits of liability and significant 

potential aggregation risks. Because this line is highly regulated by the U.S. states from a 

pricing standpoint, insurers that write workers’ compensation insurance may find it difficult to 

buy reinsurance that will cover the risks that they write. Treasury’s data, now available over 

several years, also indicates that many small insurers do not obtain reinsurance coverage for 

NBCR-related losses in workers’ compensation lines. Additionally, the reinsurance that small 

insurers do obtain is in amounts significantly lower than they are generally able to obtain for 

terrorism risk. 

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Appendix 1: 2022 Take-Up Rates by State 

Appendix 1 to this Study contains a table setting forth numerically the 2022 take-up rates, based 

upon premium, presented graphically in Figures 12 and 13, by state for both small and non-small 

insurers. Workers’ compensation is not included within these figures, although excess workers’ 

compensation is included. 

Non-Small Insurers Small Insurers Combined 

Alabama 61% 64% 61% 

Alaska 48% 54% 49% 

American Samoa 64% 53% 63% 

Arizona 68% 64% 67% 

Arkansas 56% 38% 54% 

California 61% 46% 60% 

Colorado 65% 64% 65% 

Connecticut 63% 75% 65% 

Delaware 62% 70% 63% 

District of Columbia 50% 24% 45% 

Florida 64% 62% 63% 

Georgia 47% 49% 48% 

Guam 63% 33% 59% 

Hawaii 63% 66% 63% 

Idaho 62% 77% 64% 

Illinois 70% 69% 70% 

Indiana 65% 52% 64% 

Iowa 66% 60% 66% 

Kansas 49% 37% 47% 

Kentucky 68% 83% 71% 

Louisiana 68% 76% 69% 

Maine 62% 65% 63% 

Maryland 67% 70% 68% 

Massachusetts 65% 69% 66% 

Michigan 62% 63% 62% 

Minnesota 66% 72% 67% 

Mississippi 62% 54% 61% 

Missouri 67% 71% 67% 

Montana 62% 50% 61% 

Nebraska 67% 82% 69% 

Nevada 64% 59% 63% 

New Hampshire 53% 50% 53% 

New Jersey 63% 55% 62% 

New Mexico 69% 72% 69% 

New York 61% 64% 61% 

North Carolina 69% 67% 69% 

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Non-Small Insurers Small Insurers Combined 

North Dakota 63% 52% 62% 

Northern Mariana 

Islands 62% 56% 61% 

Ohio 68% 65% 68% 

Oklahoma 70% 60% 69% 

Oregon 64% 59% 64% 

Pennsylvania 59% 73% 60% 

Puerto Rico 68% 63% 67% 

Rhode Island 53% 45% 52% 

South Carolina 65% 48% 64% 

South Dakota 64% 88% 69% 

Tennessee 66% 73% 67% 

Texas 60% 54% 60% 

U.S. Virgin Islands 73% 57% 72% 

Utah 67% 73% 68% 

Vermont 63% 56% 63% 

Virginia 61% 64% 61% 

Washington 48% 54% 49% 

West Virginia 64% 53% 63% 

Wisconsin 68% 64% 67% 

Wyoming 56% 38% 54% 

Source: 2023 TRIP Data Call 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Appendix 2: 2022 Take-Up Rates by State and Line Groups 

Appendix 2 to this Study 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 

data display and provide information by more general categories of information, Treasury 

displays the information by the following categories: (1) property insurance;131 and (2) liability 

insurance.132 Evaluation of Appendix 2 permits identification of differences in take-up rates, 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 63% 58% 61% 71% 63% 60% 

Alaska 62% 47% 60% 52% 61% 48% 

American Samoa 73% 58% 57% 54% 71% 57% 

Arizona 75% 61% 70% 60% 74% 61% 

Arkansas 65% 51% 42% 39% 64% 50% 

California 67% 56% 48% 46% 66% 55% 

Colorado 75% 62% 77% 54% 75% 61% 

Connecticut 70% 62% 71% 79% 70% 64% 

Delaware 77% 52% 73% 68% 76% 53% 

District of Columbia 42% 55% 13% 41% 35% 53% 

Florida 71% 59% 74% 56% 71% 58% 

Georgia 48% 46% 43% 58% 47% 48% 

Guam 71% 58% 27% 37% 64% 55% 

Hawaii 69% 59% 73% 65% 69% 59% 

Idaho 65% 59% 78% 77% 67% 61% 

Illinois 78% 62% 77% 74% 78% 63% 

Indiana 69% 60% 55% 49% 68% 59% 

Iowa 71% 62% 61% 66% 70% 63% 

Kansas 47% 50% 37% 41% 46% 49% 

Kentucky 75% 64% 88% 87% 77% 68% 

Louisiana 77% 64% 82% 74% 78% 65% 

Maine 70% 59% 78% 54% 72% 59% 

Maryland 71% 63% 72% 68% 71% 63% 

Massachusetts 70% 61% 75% 64% 71% 61% 

Michigan 66% 61% 62% 66% 66% 62% 

Minnesota 74% 59% 71% 76% 73% 61% 

Mississippi 67% 57% 61% 50% 66% 56% 

Missouri 72% 60% 77% 64% 73% 61% 

Montana 68% 58% 51% 52% 67% 57% 

131 Fire, Allied Lines, Boiler & Machinery, and Commercial Multi-Peril (Property) combined. 

132 Commercial Multi-Peril (Liability), Products Liability, and Other Liability combined. 

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Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace (June 2023) 

Non-Small Small Combined 

Property Liability Property Liability Property Liability 

Nebraska 74% 62% 85% 82% 77% 65% 

Nevada 70% 62% 71% 52% 70% 61% 

New Hampshire 74% 40% 66% 42% 74% 40% 

New Jersey 75% 60% 74% 46% 74% 58% 

New Mexico 75% 62% 76% 72% 75% 63% 

New York 67% 50% 68% 62% 67% 52% 

North Carolina 76% 62% 69% 66% 75% 63% 

North Dakota 67% 57% 61% 41% 67% 55% 

Northern Mariana 

Islands 69% 57% 66% 54% 69% 57% 

Ohio 76% 63% 69% 62% 75% 63% 

Oklahoma 79% 66% 68% 56% 77% 65% 

Oregon 65% 62% 59% 62% 64% 62% 

Pennsylvania 61% 52% 78% 70% 63% 55% 

Puerto Rico 74% 64% 64% 66% 73% 64% 

Rhode Island 56% 51% 37% 42% 54% 50% 

South Carolina 72% 62% 57% 47% 71% 60% 

South Dakota 70% 57% 92% 84% 77% 62% 

Tennessee 76% 61% 81% 72% 76% 62% 

Texas 67% 58% 71% 52% 67% 57% 

U.S. Virgin Islands 79% 68% 62% 52% 78% 67% 

Utah 74% 60% 76% 70% 75% 62% 

Vermont 70% 55% 69% 49% 70% 54% 

Virginia 63% 58% 61% 71% 63% 60% 

Washington 62% 47% 60% 52% 61% 48% 

West Virginia 73% 58% 57% 54% 71% 57% 

Wisconsin 75% 61% 70% 60% 74% 61% 

Wyoming 65% 51% 42% 39% 64% 50% 

Source: 2023 TRIP Data Call 

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