The Long Arm of Terror. (Editor's Prologue).
The effect on the insurance industry was no different: Few sectors were immune from the attacks. Experts predict the events will cost insurers billions of dollars more than the Northridge earthquake of 1994 and 1992's Hurricane Andrew--two of the largest insurance events ever. As big as those events were, they don't compare with Sept. 11's convergence of multiple lines of business being hit in one shot. Life, health and property/casualty commercial and personal lines insurers all took big hits on Sept. 11. (See cover story, "Assessing the Damage," on page 26.)
More than 18,000 claims--11,000 commercial and 7,000 personal--had been filed in connection with the attacks as of early November, according to the Disaster Insurance Information Office.
Just as the attacks accelerated the country's descent into a deeper economic recession, they forced an insurance industry that had enjoyed a soft market for nearly a decade to harden overnight. (See "A Hard Landing," page 32.) The result is that underwriters accustomed to soft-market pricing will quickly have to learn to assess and price risk in a hard market.
Inland marine writers, too, are feeling the effects of Sept. 11, but the pressure is coming mainly from rising reinsurance costs. (See "Sudden Impact," page 54.) Many have to decide whether to include terrorism coverage in new policies.
As workers continue to remove the rubble of the World Trade Center in New York, insurance claims keep streaming in.
"We'll be feeling this for a long time, and claims generated from this will be coming in for a long time," said Jim Howard, manager of the Northeast property operation for Hartford Financial Services Group.
DAVID T. HILGEN
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|Comment:||The Long Arm of Terror. (Editor's Prologue).|
|Article Type:||Brief Article|
|Date:||Dec 1, 2001|
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