Leaders of the property/casualty insurance industry expect the American Congress to extend the Terrorism Risk and Insurance Act in 2007, as the potential for further attacks remains difficult to predict.

The Insurance Information Institute (III) surveyed senior insurance managers at its 11th annual Property/Casualty Insurance Joint Industry Forum last week. Most of them believe the US government will continue to offer cover.

The study found that 89 percent of executives in the property/casualty industry are confident that the new Congress will move quickly to extend the law for a significant period or to provide a permanent backstop.

“Five years since 9/11 and the frequency and severity of future attacks are still fundamentally unknowable,” said Dr. James Valverde, vice president of Economics and Risk Management, III. “The need for a public-private partnership continues. The benefits are many, including promoting stability in the financial markets and to focus the federal role on those risks the private sector is not able to assume,” he explained.

However, when it comes to whether Congress will adopt a National Catastrophe Insurance Plan in 2007, 88 percent of respondents do not think it will occur. In addition, 63 percent of insurance leaders think the push for an Optional Federal Charter will not gain momentum in the new Congress.

Respondents still believe that insurers will prevail in wind vs. water suits. Eighty-one percent are convinced that litigation will be successfully resolved in favor of the insurance industry.

Looking at the industry's financial performance, a majority of industry leaders believe the market will soften in most property/casualty lines.

Broken down by lines of insurance, 71 percent of respondents do not think there will be an improvement in personal auto; 65 percent do not expect an improvement in homeowners; 54 percent do not expect an improvement in workers compensation; and 70 percent do not expect an improvement in commercial lines.