Insurers Pass Terrorism Costs Along

THE JOURNAL RECORD, November 13, 2001 | Go to article overview

Insurers Pass Terrorism Costs Along


OMAHA, Neb. (AP) -- Insurance companies rocked by claims from the Sept. 11 terrorist attacks are recovering, but the cost will likely be passed onto the nation's businesses in the form of increased premiums for workers compensation and property insurance.

Hardest hit by the rise in insurance rates, analysts say, will be the airline, shipping and energy industries, as will the owners of high-profile buildings.

Consumers, however, including those with home and car insurance policies, shouldn't feel the pinch, analysts say, because companies suffered the primary loss and face the largest risk.

"We are hearing reports of dramatic cost increases in workers compensation and other property casualty lines," said Eric Oxfeld, president of the business lobbying group UWC-Strategic Services on Unemployment and Workers Compensation.

High insurance costs for businesses could lead to higher prices on some goods and services and possibly job layoffs, Oxfeld said.

The insurance industry insists that it needs government help to absorb another hit or series of hits as large as the payouts required by the Sept. 11 attacks.

Destruction of the 110-story twin towers in New York's World Trade Center and damage to the Pentagon in Washington will bring an estimated $50 billion in payouts by U.S. companies, the largest insured loss ever.

Lloyd's of London estimates its losses at $5.36 billion, and Omaha-based Berkshire Hathaway estimates its insurance companies will pay out $2.2 billion. American International Group of New York puts its pretax loss at $820 million.

Stock prices for Berkshire Hathaway and American International dropped after the attacks as investors feared high losses. Those stocks have rebounded since the companies have said they can manage the large payouts. Investors also know that increases in insurance rates can bring higher profits.

"The initial reaction is `Oh my God, these guys are going to have to pay a ton of money,'" said Anna Dopkin, portfolio manager of T. Rowe Price Financial Services Fund. "But the other side is an accelerated rise in insurance rates."

For the first time, major reinsurance companies, which assume part of the risk covered by insurers and which had not excluded terrorism in their policies, are struggling to take into account the costs of terrorism. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Insurers Pass Terrorism Costs Along
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.