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The U.S. terrorism and political violence (PV) insurance market is evolving amid rising risks. An uptick in active-assailant attacks, domestic extremism, and civil unrest is reinforcing flexibility, agility, and resilience as insurers navigate an increasingly complex world.

While 2025 data indicate volatility and increases in active assailant incidents, the exposure remains a persistent feature across commercial, educational, and public sector risks. From January-September 2025, there were approximately 341 mass shooting incidents (three or more casualties) across the U.S., resulting in more than 300 fatalities and 1,500 injuries, according to a report from the Department of Homeland Security. Despite a 50% decline in FBI-defined “active shooter” incidents (25 in 2024 compared to 50 in 2023), the five-year mean remains elevated at 44.6 incidents per year (2020-2024).

Meanwhile, average casualty counts have increased from 8.9 per event (2020) to 11.2 (2024), reflecting higher lethality rates, the FBI reported. The increase in severity escalation, rather than frequency alone, has been the key underwriting concern–particularly for entities with high occupancy densities and limited egress infrastructure. As a result, insurers are working closely with brokers to educate insureds about their active assailant policies and help strengthen their risk management protocols.

Coverage and Capacity Response to Active Assailant Incidents

The market response has focused on wording precision and capacity differentiation, including:

• The refinement of trigger language distinguishing “malicious attack,” “active assailant,” and “terrorism” events.
• Broader sub-limits for non-damage business interruption (NDBI), crisis response costs and specific, industry-focused coverages (e.g., school bus route protection).
• Retention structures increasing from 25%-40% since 2023 on most standalone active-assailant products.

Carriers have also responded to this growing risk by partnering with brokers, insureds, and third-party providers to increase risk mitigation. This includes providing risk overviews by crisis management professionals, prevention training and premium credit for active preventative measures, as well as AI-trained video monitoring, detection, license plate reader cameras, and other technologies.

‘Political violence exposures have escalated sharply due to political polarization and election-linked volatility.’

Political Violence Risk: Polarization and Capacity Stratification

Political violence exposures have escalated sharply due to political polarization and election-linked volatility. Election-related violent threats surged 300% during the 2024 campaign cycle, and attacks against government facilities and public institutions have increased by 45% year-on-year, according to Federal Bureau of Investigation data.

The Department of Homeland Security (DHS) recorded more than 1,200 domestic violent extremist incidents in 2024–a 73% increase from 2023, and the highest since national tracking began. These incidents have risen mainly because of increasing political polarization, heightened rhetoric during election cycles, and the proliferation of extremist ideologies across the country. Meanwhile, ideologically targeted violence now constitutes 68% of domestic terrorism cases.

For PV risks, insurers are working with brokers and insureds to decrease their profile by using measures akin to active assailant such as increased monitoring, prevention training, and enhanced wording to provide not only direct coverage if an event occurs but also access to pre-event crisis management.

Reinsurance and Primary Market Dynamics

While headline capacity remains available, reinsurer selectivity has heightened. Primary carriers are encountering:

• Narrower wordings with emphasis on explicit insurrection, riot, or civil commotion triggers.
• Reinsurance treaty language requiring TRIA alignment for terrorism backstop eligibility.
• Geographic rating differentials up to 40% between urban centers and rural exposures.

Average premium movements are tracking between +15% and +25% across PV classes through 2026, with aggregate limits tightening 10%-15% year-on-year, due to capital preservation strategies that are being imposed by insurers to protect profitability.

Terrorism Risk: Emerging Exposures and Challenges

As of 2024, domestic terrorism accounts for approximately 75% of all FBI terrorism investigations. The highest frequency segment remains in lone-actor incidents, which exhibit short-duration, high-intensity loss characteristics and minimal prior indicators. Domestic terrorism’s rise in the U.S. has been largely associated with a rise in increased partisan divide, political fracturing, and far-right and far-left actors.

While incidents related to Islamist extremism continue to decline (ISIS- and Al Qaeda-related plots are down 35% from 2020 levels), transnational criminal cartels have emerged as a distinct insured peril, after they were designated as terrorist entities by the current administration. This specific reclassification expands exposure mapping across the southwestern United States and introduces coverage ambiguity in traditional terrorism forms.

Insurers are addressing coverage ambiguity in traditional terrorism forms through enhanced wording precision and explicit trigger language refinement. The market is responding by clearly distinguishing between “terrorism,” “active assailant,” and “malicious attack” events within policy language, ensuring that emerging threats–such as the recent reclassification of transnational criminal cartels as terrorist entities–fall within defined coverage parameters. This includes developing broader definitions that capture lone-actor incidents and hybrid attack scenarios that don’t fit the Terrorism Risk Insurance Act’s (TRIA) foreign terrorism certification requirements, while simultaneously requiring reinsurance treaty language to align with TRIA eligibility standards for backstop protection.

Insurers are also collaborating with state regulators and industry organizations to establish standardized policy language that reduces definitional gaps, particularly for domestic extremism and ideologically motivated violence.

The TRIA Mechanism

TRIA remains the central market backstop. Its key structural thresholds include:

• An industry aggregate trigger: $200 million.
• Federal participation: 85% of insured losses above insurer deductibles.
• An aggregate liability cap of $100 billion per annum.

Since TRIA was established in 2002, no event has triggered federal reimbursement, raising market skepticism regarding liquidity timing and definitional hurdles. Renewal uncertainty beyond December 31, 2027, is already factored into midterm reinsurance placement strategies, especially for high concentration risks such as major metropolitan areas, critical infrastructure, and high-profile commercial properties.

However, insurers are proactively preparing for this transition by strengthening their resilience frameworks using robust catastrophe modeling that incorporates hybrid threat scenarios, diversified reinsurance strategies that reduce dependency on TRIA backstop mechanisms, and enhanced capital reserve positioning. Carriers are also collaborating with federal agencies and industry stakeholders to advocate for early legislative clarity and ensure market continuity beyond 2027–positioning themselves to maintain stable capacity regardless of the outcome.

The market trajectory points toward continued innovation, with bundled terrorism and active-assailant solutions, parametric supplements, and enhanced risk intelligence forming the foundation of next-generation coverage. Through preparedness, resilience, and strategic adaptation, the industry is well-equipped to provide stable protection amid evolving threats in 2026 and beyond.

Topics Trends USA Catastrophe Natural Disasters