Ananova : Insurers face £35 billion ceiling on World Trade Centre losses

Standard & Poor says the insurance system will be able to absorb up to £35 billion in losses from the terrorist attacks on the World Trade Centre.

Insurable losses of over £6 billion - £10 billion will dent individual insurers' balance sheets, it said.

It emerged that only one of the World Trade Centre's towers was insured, because the possibility of a double accident was thought too improbable.

Steve Dreyer, managing director for US insurance industry ratings at S&P, said: "While we cannot yet endorse a specific estimate, companies so far have acknowledged around £2.7 billion in losses, a figure which will likely go much higher.

"Once insurable losses exceed £6 billion or £10 billion, we would expect to see a significant impact on balance sheets of individual insurers. However, the totals would have to exceed £35 billion before we would begin to worry about the insurance system."

Analysts point out that the insurance system is heavily capitalised and can sustain significant damage without threatening the overall stability of the system.

By comparison, Hurricane Andrew cost the industry approximately £13.6 billion and the 1993 World Trade Centre bombing cost under £680 million.

Story filed: 07:48 Friday 14th September 2001

-- PHO (owennos@bigfoot.com), September 14, 2001

Answers

CHECK YOUR INSURANCE POLICY! MANY INSURANCE POLICIES DO NOT PAY FOR "ACTS OF WAR" These people may be hit by a double whammy when they find out their insurance excludes payment for damage caused by an act of war!

-- ainitfunny (justme@prodigy.net), September 14, 2001.