Carriers' decision to end six years of litigation and rancor andsettle claims by the developer of the World Trade Center is apositive move for insurers, removing a major thorn in theindustry's side, industry experts said.

Seven carriers agreed Wednesday to pay $2 billion to settleoutstanding claims over the World Trade Center attack of 9-11 afterNew York State officials stepped in to mediate an agreement.

“I think that all the parities are happy to put this behindthem,” said Robert P. Hartwig, president and chief economist forNew York-based Insurance Information Institute. “Obviously, thecost and uncertainty associated with litigation works to nobody'sbenefit.”

Noting that total payout of claims by the industry from the 9-11attack stands at an estimated $37 billion, he said the settlementwas within the range of what insurers expected, based on the 2004court decision. The settlement amount should be within insurers'reserves, he said, meaning little impact on 2007 earnings.

Mr. Hartwig said he expects no adverse reaction from investorsand the industry is financially strong today.

He added that one of the lessons from the Trade Center disputeis the need for separate terrorism coverage under the TerrorismRisk Insurance Act and elimination of ambiguities in contractlanguage that led to the litigation in the first place.

“It's good for the industry to get this done and over with,”said Donald Light, an insurance consultant with Boston-basedCelent. “Insurers had some good legal grounds [to pursue], but froma public relations standpoint it was not a good sequence ofevents.”

The dispute over funds had threatened reconstruction efforts atthe site and the building of the Freedom Tower highrise.

Randy J. Maniloff, an attorney for the law firm White &Williams in Philadelphia, which represents insurers, said the TradeCenter dispute resembled the legal disputes that arose fromHurricane Katrina.

“This is another example of insurers being a big target forthese kinds of situations,” he said. “There is a lot of pressureput on them to ignore their right to litigate a dispute when thingslike this happen.”

He added that it would not have been surprising to seelitigation drag on for another six years in this case if asettlement had not been reached.

Ann W. Spragens, senior vice president, secretary and generalcounsel for the Des Plaines, Ill.-based Property Casualty InsurersAssociation of America (PCI) insurers trade group, said in ane-mail: “It's good for insurers to be seen agreeing to pay claimsbecause it is too easy to demonize the industry as having no soul,when legally we have to raise questions about whether there iscoverage.”

She said such characterization of the industry is “too common atheme in current public discourse and it simply isn't thetruth.”

As for public officials stepping in to reach a settlement, shesaid they “can help facilitate such a resolution.” She noted thatMississippi Insurance Commissioner George Dale facilitated theresolution of homeowners' claims from Hurricane Katrina in hisstate.

She added that yesterday's settlement “may help remind bothindustry and government officials that there is a positive rolethat can be played in commercial lines situations, too, so it setsa good example from that perspective.”

Meanwhile, in another dispute situation, Paris-based reinsurerSCOR said it would seek arbitration over its share of itsreinsurance contract with Allianz, one of the carriers named in thesettlement, saying the settlement “does not respect the terms andconditions” of its reinsurance contract.

A spokeswoman for Allianz said the company could not comment onits reinsurance contracts. Several observers, however, said SCOR'sdecision would have no bearing on the payment.