Insurers Say Losses Covered
Stefanova, Kristina, The Washington Times (Washington, DC)
Byline: Kristina Stefanova
Insurance companies yesterday began reviewing claims resulting from the terrorist attack in New York and assuring businesses that the industry can cover the estimated $10 billion to $15 billion in losses.
Several leading European insurers, including Munich Reinsurance, Swiss Reinsurance and Allianz, said combined the damage will cost them nearly $3 billion. Canada's Manulife Financial Corp., which sells life insurance to wealthy individuals in New York and insures about a third of the reinsurance contracts for life and health policies in the United States, said its tab would be at about $64 million.
Thousands of people are believed to have been killed after two hijacked planes slammed into the World Trade Center Tuesday, demolishing the two 110-story office towers. Another plane crashed into the Pentagon, but no claims will result from there, as the Pentagon is federally insured. It is likely claims will also arise from the fourth hijacked airliner that crashed in a Pennsylvania cornfield.
The terrorist attack is being called the third-most expensive disaster in American history. Hurricane Andrew currently tops that list, having cost insurers about $18 billion when it hit Florida in 1992. An earthquake that shook Northridge, Calif., in 1994 ranks second, doing almost as much damage as Andrew.
The biggest insurance losses from a man-made disaster were $775 million from the Los Angeles riots in 1992; The bombing of the World Trade Center a year later resulted in $510 million in claims.
Losses resulting from Tuesday's terrorist attack are likely to have a less severe impact on the industry, because claims are not strictly about property damages, but spread across several types of policies, industry observers explained. …