Editorial Comment:
The Pain Of Sept. 11 Endures
Last year on Sept. 11, we received a phone call alerting us that a tourist helicopter or executive jet had somehow accidentally crashed into New York's World Trade Center.
Many of us here in National Underwriter's editorial headquarters in Hoboken, N.J., ran the two blocks to Frank Sinatra Park to see the damage for ourselves. The park, on a refurbished pier, juts out into the Hudson River, facing New York City's eastern skyline. Sure enough, one of the towers was in flames.
Shortly thereafter, to our horror, a jumbo jet crashed into the second tower, and we knew this was no accident.
All of our lives were changed forever that day, not only as Americans facing a war on terrorism unlike one we had ever fought before, but also as journalists covering an insurance industry that would be called upon to meet challenges that those in the business of risk management had never imagined in their worst nightmares.
Our hearts went out to all those who were lost in New York, Washington and Pennsylvania, as well as their families and colleagues. But we especially sympathized with the nearly 500 people within the insurance community, at Aon, Marsh and others, who did not survive the attack or its deadly aftermath. And we counted our blessings for all those fortunate enough to escape with their lives.
Our thoughts keep returning to a makeshift memorial that was set up in Sinatra Park. It included pictures of those who were lost, flowers, flags and poems lying in a pile facing Lower Manhattan. A portion of one anonymous poem dedicated to the victims stands out: "Your lives were not lost in vain. Your sacrifice has united this nation against a great evil. Your family, friends, colleagues and countrymen shall prevail."
The Industry's Report Card:
Inevitably, our attention as professionals turns to the practical matters at hand following any catastrophe–whether natural or, as in the case of Sept. 11, man-made.
The industry, on the whole, has done a remarkably good job coping with the Sept. 11 disaster. Despite being destined to cause the biggest insured loss from any event in history, the terrorist attack did not sink the industry financially. Insurers have paid billions in losses, and they will pay tens of billions more before all claims are settled–all for an emerging war risk they surely never intended to cover.
The New York Insurance Department reports that of some 31,800 claims related to Sept. 11 thus far, there have only been about 257 complaints filed–a laudable performance by the industry.
Of course, one of those "complaints" is a whopper, as leaseholders for the World Trade Center battle insurers in court over whether the attack was one or two events–a $3.5 billion question.
There is also the matter of terrorism exclusions leaving many policyholders (and primary insurers) bare. While the industry has a legitimate concern over so-called "trophy" properties and aggregation exposures, many low-risk properties have been left in the lurch.
In the end, the bottom line is that the industry took a knockout punch to the chin on Sept. 11 and remained standing. Whether insurers and their policyholders are able to withstand a second blow of equal force, however, will in large part depend on whether Congress puts in place a viable terrorism reinsurance backstop.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 9, 2002. Copyright 2002 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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