Brokers Help Clients, Economy Endure

Yes, symbols of the nations prosperity and security crashed to the ground, but not our core promises. Yes, the strike hit the heart of the risk management industry. Hundreds upon hundreds of the professionals to whom victims would ordinarily look to for assistance were among those first cut down.

And, yes, as an industry, our first response has been to bind our wounds, care for the injured, and recover the dead. Yet, in my view, and in my conversations with insurance leaders of every stripe facing the largest aggregate losses ever, our industry never once lost sight of the work we are called to do.

We mourn in private–and we do; but we have the work of public enterprise to do. The very essence of who we are as commercial insurance professionals–and what we do–now can help shape Americas recovery, confidence and resolve.

When we take into account all that has occurred since Sept. 11, how the world changed in an instant, we see the best in America. Public officials, business leaders and private citizens united to save, serve and bring the nation back. And we see this industry, so hard hit, come together, not only because of business interests, but also in the national interest.

In the immediate aftermath of the attacks (when The Council of Insurance Agents and Brokers had the duty to sift through conflicting accounts to keep our members worldwide apprised of what we knew about the scope and scale of damage and loss) our members, often on their own and without being asked, made offers of immediate assistance to their peers in New York amid the devastation.

In the days since Sept. 11, where perhaps a week before there had been robust competition among the largest firms in our membership, or between national and regional firms we represent, we have seen only compassion, amazing cooperation, and heartfelt generosity from all members to all members and to all members clients as well.

From offers of office space for displaced claims operations in the New York area, to offers of claims adjusters from regional brokers hundreds and thousands of miles away from Manhattan, to offers of help servicing remote clients across the nation, we see our members, big and small, national and regional, offer and do whatever they can to help.

This outpouring of business assistance was more than simple offers of help to those members who were most affected; it goes to the heart of what we do and who we are. Their purpose is to get the most help to clients in the fastest way.

In an emergency of the scope and scale we saw last month, the best interests of commercial insurance clients, large or small, are the best interests of the nation.

Without missing a beat, our members and the entire sector began first to mumble, then to roar: "We will recover. We are here to help. We will not be defeated by terror. As a nation, we are open for business."

I am incredibly proud to see how The Councils members who were not directly affected by the attacks mobilized to help clients. Long before the dust settled and the smoke cleared our members were at work on claims processes.

Hundreds upon hundreds of commercial enterprises in and around the World Trade Center needed help and resources to acquire new office space, obtain new equipment and hire qualified staff. The Councils members leapt to the challenge, and they continue to keep the promises of assistance that are commensurate to such Herculean tasks.

In the aftermath of the attacks, The Councils leaders decided to cancel our annual meeting, The Insurance Leadership Forum at the Greenbrier in White Sulphur Springs, W.Va. Its the first time in the 88-year history of our association that the tradition has been broken.

It was not a decision made lightly or without real regret. Yet, our leadership and their colleagues in the co-sponsoring Council of Insurance Company Executives believed that collective sector resources would be most needed, better dedicated and best spent by taking care of employees and clients, and taking care of the nation at a critical time in our history.

Many question the ability of the insurance industry to financially respond to the attacks. While it is still too soon to tell what the overall impact of this terrible tragedy will be, it is clear that it will be the greatest insured loss in U.S. history. Several different lines of insurance coverage will be affected, including commercial property, workers' compensation, business interruption, airline insurance, life insurance and health insurance, to name a few.

But I say, look at what we have said and done thus far. I challenge anyone to name any insurance leader who has demurred. Our industry will meet the obligations stemming from the attack of Sept. 11, and the industry will weather the storm ahead. We are strong, well capitalized and financially sound.

Let the students of our industry study Sept. 11 as the classic illustration of risk transfer principles. Reports indicate that coverage on the World Trade Center alone involved 22 different insurers, including several non-U.S. entities. Some of that risk has been spread further among reinsurers, from the United States and from other countries.

While it is too soon to know the magnitude of all losses from the event, it is clear that insurance coverage on the World Trade Center and the surrounding businesses is spread among insurance entities, which can and will make good on their obligations. This time, we can say to the nation and its business and political leaders with relative confidence: we can rebuild what was knocked down, including American confidence.

Looking forward, neither America nor our industry will be the same. Risk is no longer merely international, but global. Threats can, and do, come from anywhere and everywhere. Who would have believed the twin towers of the World Trade Center could or would be turned into a pile of dust and rubble?

Now, we know the impossible is possible. To account for new possibilities, we must change the way we approach risk management. The role of agents and brokers as expert risk management consultants will be ever more important.

International terrorism is a stealthy enemy. It is capable of wreaking more havoc than any natural disaster ever has. While the insurance industry has the compassionate strength and steely resolve to meet its obligations this time, we may live to see a day when other multiple catastrophic losses, including the possibility of multiple terrorist attacks, exhaust our resources.

We hear some talk about the formation of a federal mechanism to help lessen the impact of future terrorist attacks. The mechanism would be similar to Pool Re, set up by the British government in the aftermath of several terrorist attacks throughout Great Britain. It would provide government-backed reinsurance for terrorist attacks and provide a backstop for the industrys losses from catastrophic events. The Council has supported similar ideas in the past. We agree now that this is an idea deserving of serious consideration in the future.

That said, The Council and its members are prepared for a rough road before us. Over the past hard days and weeks, we have delivered on promises. We can be proud of that.

We are the mighty industry helping manage the risks of a mighty nation and a mighty global economy. Our sector is soundly built upon the solid foundation of human relationships, understanding of danger and risk, and a real concern that clients prosper. That is what we have done, what we will do, and how we help move our nation forward.

Ken A. Crerar is President of the Washington- based Council of Insurance Agents and Brokers.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 8, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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