The horrific events of September 11, 2001 fundamentally alteredthe insurance industry in a multitude of ways. To examine thosechanges, we asked carrier executives, catastrophe modelers and fivetop risk managers to explain in their own words how the coveragelandscape has been transformed in the wake of theattacks. 

Peter Zaffino

President and CEO, Marsh Inc., a member of Marsh & McLennanCos. 

Marsh & McLennan suffered a grievous loss in thetragedy on the morning of Sept. 11, 2001. Of approximately 2,000colleagues and consultants working in or visiting our offices inthe Twin Towers, more than 350 perished. It's a void that willnever be completely filled.

In 2003, the company dedicated a permanent memorial to our lostcolleagues in the outdoor plaza adjacent to our headquartersbuilding as a way to always remember and cherish them.

In terms of the industry, the terrorist attacks of 9/11generated profound effects on both the insurance industry andglobal risk-governance practices. From that day forward,preconceptions regarding the potential for, and exposure to,extreme or “worst-case” scenarios could no longer be deemedreliable.

In the decade since 9/11, the world has become flatter—moresusceptible to reverberations—when it comes to the impact ofadverse events.

The global financial crisis and economic downturn that began in2008 and recent natural catastrophes have heightened awareness ofglobal interconnectedness, vulnerabilities and governance bestpractices.

Enterprises, institutions and governments across the world havecome to understand these dynamics—and the imperative to adopt theculture and practice of proactive, continuous, organization-widerisk management.

Tom Lawson 

Executive Vice President, FM Global

9/11 forever altered the way the insurance industry looksat risk. Many insurers used to underwrite locations in majormetropolitan areas without much thought for the aggregation ofnon-natural, catastrophe-related risk. 9/11 highlighted an unseenexposure, spotlighted the need for exposure analysis and introducedthe crtical need for terrorism-aggregation modeling. 

Sept. 11, 2011 was a wake-up call. For many organizations,terrorism became, and remains, a top-of-mind exposure. Overall, wesee that insurers and insureds are much more aware of catastrophicrisk—man-made or otherwise. 

What hasn't changed since the events of 9/11 is the importanceof companies being prepared for any type of catastrophe. Thatstarts with understanding your exposures, remaining vigilant intaking steps that can prevent or minimize loss, incorporatingmeasures that protect people and property, testingemergency-response plans and having alternative plans in place toensure business continuity.

Neal Aton

President & CEO 

Wells Fargo Insurance Services

Impacts from 9/11 can be found in all areas of theinsurance industry. The tragic events of that day forced buyers,insurance companies and brokers to face many changes andchallenges. Insurance buyers now require their binders and policiesto be delivered on time and to be completely accurate in case of anunexpected large loss.

Underwriters want to frequently review disaster-recovery plansand employee concentrations to better understand their exposure forworkers' compensation. Brokers must perform, and ensure carriersperform, at service levels the industry had never achieved before9/11.

Overall, risk managers, risk consultants for carriers, andbrokers have all spent the past decade working together to improverisk management and make the world a little safer. In particular,the level of thought behind safety and disaster recovery issignificant compared to 10 years ago—a good change for everyone.The industry has risen to a new level of service and is alwaysthinking of ways to help if another tragic event occurs. 

Greg Case

President and CEO, Aon

Ten years ago, Aon lost 176 friends and colleagues as aresult of the tragic events of Sept. 11. On this anniversary, as inthe past, it will be a day for us to remember, reflect andrenew.

As we honor their memory this year, we realize that their spiritcontinues to live on in all of us. One such example is that of ason of an Aon colleague who died on Sept. 11. When he graduatedfrom college, he thanked our firm for the support he received,saying, “…Seeing the scholarships as a tribute to my father havemade me work very hard to do my best.”

“To do my best” is a phrase that can be used to define thecompanies in our industry that stepped up and took on the risk sothat our clients could do what they do best—and our economy couldget back on its feet.

Jack Seaquist

Assistant Vice President and Terrorism Spokesperson, AIRWorldwide

While still in its early stages, the usage of modeling forterrorism has matured since 9/11 in the development of theunderlying components of the model:

• Weapon-damage functions for the range of weapons that might beused by terrorists tuned to the urban-density environment.
• The development of scenarios based on an extensive database ofpotential targets across the sectors attractive toterrorists. 

The main challenge remains the estimate of the overalllikelihood of an attack. The estimates have been reduced over timeas counterterrorism activities here and overseas have successfullyprevented attempts at large-scale attacks. The result is that anyattacks today are more likely to be performed by a small group orby a lone wolf who has the ability to plan and execute a plot fromunder the radar. 

Recent history has shown the frequency of attacks to be quitelow and of lower severity. This is reflected in AIR's updatedterrorism model, released this summer.