Sustained Consolidation Predicted as a Result of Sept 11

The insurance industry has entered a period of sustained consolidation, both domestically and internationally, as a result of the Sept. 11 attacks, according to a year-end forecast by the Transaction Services group at PricewaterhouseCoopers. Bill Chrnelich, a Transaction Services partner, commented, "The industry will emerge stronger from this stressful period, but with fewer companies. The September 11th terrorist attacks are clearly accelerating the ongoing consolidation and globalization of the insurance industry." Chrnelich pointed to the following factors: The weak will not survive. With industry estimates upwards of $50 billion to $70 billion in losses from attacks on the World Trade Center and the Pentagon, weaker players - and those with a disproportionate share of the claims - may become targets for takeovers, workouts or bankruptcies over the next six to twelve months.