The horrific events of September 11, 2001 fundamentally altered the insurance industry in a multitude of ways. To examine those changes, we asked carrier executives, catastrophe modelers and five top risk managers to explain in their own words how the coverage landscape has been transformed in the wake of the attacks.

Peter Zaffino

President and CEO, Marsh Inc., a member of Marsh & McLennan Cos.

Marsh & McLennan suffered a grievous loss in the tragedy on the morning of Sept. 11, 2001. Of approximately 2,000 colleagues and consultants working in or visiting our offices in the Twin Towers, more than 350 perished. It's a void that will never be completely filled.

In 2003, the company dedicated a permanent memorial to our lost colleagues in the outdoor plaza adjacent to our headquarters building as a way to always remember and cherish them.

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

In the decade since 9/11, the world has become flatter—more susceptible to reverberations—when it comes to the impact of adverse events.

The global financial crisis and economic downturn that began in 2008 and recent natural catastrophes have heightened awareness of global interconnectedness, vulnerabilities and governance best practices.

Enterprises, institutions and governments across the world have come to understand these dynamics—and the imperative to adopt the culture and practice of proactive, continuous, organization-wide risk management.

Tom Lawson

Executive Vice President, FM Global

9/11 forever altered the way the insurance industry looks at risk. Many insurers used to underwrite locations in major metropolitan areas without much thought for the aggregation of non-natural, catastrophe-related risk. 9/11 highlighted an unseen exposure, spotlighted the need for exposure analysis and introduced the 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, we see that insurers and insureds are much more aware of catastrophic risk—man-made or otherwise.

What hasn't changed since the events of 9/11 is the importance of companies being prepared for any type of catastrophe. That starts with understanding your exposures, remaining vigilant in taking steps that can prevent or minimize loss, incorporating measures that protect people and property, testing emergency-response plans and having alternative plans in place to ensure business continuity.

Neal Aton

President & CEO

Wells Fargo Insurance Services

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

Underwriters want to frequently review disaster-recovery plans and employee concentrations to better understand their exposure for workers' compensation. Brokers must perform, and ensure carriers perform, at service levels the industry had never achieved before 9/11.

Overall, risk managers, risk consultants for carriers, and brokers have all spent the past decade working together to improve risk management and make the world a little safer. In particular, the level of thought behind safety and disaster recovery is significant compared to 10 years ago—a good change for everyone. The industry has risen to a new level of service and is always thinking 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 a result of the tragic events of Sept. 11. On this anniversary, as in the past, it will be a day for us to remember, reflect and renew.

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

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

Jack Seaquist

Assistant Vice President and Terrorism Spokesperson, AIR Worldwide

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

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

The main challenge remains the estimate of the overall likelihood of an attack. The estimates have been reduced over time as counterterrorism activities here and overseas have successfully prevented attempts at large-scale attacks. The result is that any attacks today are more likely to be performed by a small group or by a lone wolf who has the ability to plan and execute a plot from under the radar.

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

Special Reports /

9/11, 10 Years Later: How The Insurance Industry Has Changed

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