AM Best Issues Comment & Rating Implications of Sept 11 Attacks

Since the morning of Sept. 11, A.M. Best Co. has been gathering public and private information in order to assess the financial impact as well as the nuances of insurance coverage associated with the tragic attacks. To date, industrywide loss estimates are broad, ranging from $30 billion to $70 billion. Many specific estimates provided by companies directly affected by these events have been subject to significant upward revisions. A.M. Best believes this trend is likely to continue, given the discrepancies between gross estimates before reinsurance and net losses reported by specific companies in different segments of the industry. Although such disparity in loss estimates is typical in the days following the catastrophic events, the tragedy that occurred on Sept. 11 is unique and unprecedented in both its scope and complexity of potential losses.