ISO Sees '01 CAT Loss As $24 Billion

The number 2001-related claims year-to-date was 1.5 million, PCS said.

PCS said the dollar amount of loss and number of claims from the September 11 terrorist attack in New York City and at the Pentagon is still an uncertain figure.

According to PCS estimates, insured-property losses from the attack stand at $16.6 billion, generating 74,000 personal and commercial property, and vehicle claims. Losses from this event will take several months to compile with greater accuracy, so the PCS estimate is likely to be revised further.

The PCS said its estimate of September 11 losses only applies to insured losses for property damage and related coverages, such as business-interruption insurance, and that the estimate represents only a portion of the total insured losses from the attack.

Their estimate does not include liability insurance, workers' compensation, aviation property-casualty losses, or life and health insurance from the World Trade Center complex and the immediate surrounding area, as well as locations near the Pentagon in Virginia.

Many policyholders are unsure of their losses and may have filed only partial or incomplete claims, while others may not yet have filed any claims with insurers, because their records are missing or destroyed, PCS noted.

More precise insured-loss estimates from the September 11 terrorist attack will take time to compile because of the complexity of the event, PCS reported.

The difficulty of loss estimation is compounded by potential litigation involving insurers, reinsurers and major property owners. That could significantly affect ultimate loss settlement, the company said.

PCS noted that the claims-estimating process by insurers in New York City is taking place building by building and tenant by tenant in those buildings. Claims adjusters' access to the World Trade Center and surrounding areas was inhibited by rescue operations, the shutdown of much of downtown Manhattan following the attacks, and health concerns arising from debris in the area.

Final insured-property loss estimates will be significantly influenced by such issues as the cost of relocating businesses; replacing lost employees; rebuilding destroyed office space; adjusting claims for loss resulting from the order of civil authority or business-interruption losses from both within and outside New York City, and the resolution of personal property claims from the collapse of the Twin Towers, PCS said.

Prior to September 11, fourth-quarter 2001 insured losses were less than $500 million from four catastrophic events, making this quarter's losses among the lowest in the past 10 years. PCS defines a catastrophe event as $25 million or more in insured property losses affecting a significant number of property-casualty policyholders and insurers.

PCS estimates represent anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, and business-interruption losses. The estimates exclude loss-adjustment expenses.