Claims News Service, Dec. 5, 9:56 a.m. EST — The Terrorism Risk Insurance Act subgroup of the American Academy of Actuaries, a nonprofit, professional organization that represents actuaries in the U.S., has issued an analysis that supports the extension of TRIA. The act currently is set to expire in less than a month.

The “magnitude of potential insurance claims due to terrorist events makes permanent federal legislation necessary in order to make terrorism coverage widely and readily available,” the group concluded. The subgroup based its conclusion on its analysis of the potential impact of terrorist attacks and “how an insurer may react to a sudden change in its perceived exposure to catastrophes.”

The results of a major terrorist attack could be catastrophic and could overwhelm the insurance industry, the group asserts. “Terrorists with access to nuclear, biological, chemical, and radiological weapons of mass destruction have the potential to cause single-event catastrophic insured losses many times the size of the total insured losses from Sept. 11, 2001. Modelers now estimate that terrorists with such weapons could cause insured losses ranging up to about $700 billion, depending on weapon type and location.”